BPMN 3023 STRATEGIC MANAGEMENT

(GROUP C)

STRATEGIC AUDIT REPORT

SHANGRI-LA HOTELS

PREPARED FOR: DR. YUSMANI BINTI MOHD YUSOFF

PREPARED BY:

SITI FATIMAH BINTI HASSAN 237585

NURUL IZZATI BINTI ZAINAL 238162
NUR AISHAH MAULAD JOHARI 240993
MUHAMMAD NUR SHAFIQ BIN SHUID 242800
NURUL HAIRIN BT HASSAN 242857
ALIAS BIN SAAD 242860

SUBMISSION DATE:
6 DECEMBER 2018

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Table of Contents
1. INTRODUCTION ABOUT SHANGRI-LA ...................................................................................................3
1.1 Company’s Name ..........................................................................................................................3
1.2 List of Board of Directors ....................................................................................................................4
1.3 List of Top Management Team ...........................................................................................................6
1.4 Product and Services Provided ...........................................................................................................7
1.5 Location of Business............................................................................................................................8
1.6 Company’s Structure.....................................................................................................................9
1.7 Company’s Vision, Mission and Objectives...................................................................................... 11
2. STRATEGIC ISSUES OR PROBLEMS IN COMPANY’S CURRENT SITUATION ......................................... 13
2.1 First Issue: Insufficient manpower to conduct daily operations...................................................... 13
2.2 Second Issue: Standard of the hotel are not at par. ........................................................................ 14
2.3 Third Issue: Maintenance Handled by Shangri-La Hotel .................................................................. 14
2.4 Fourth Issue: Lack of entertainment provided on the beach front by Shangri-La Hotel ................. 15
2.5 Fifth Issue: The service serve to customers takes long time and have to queues ........................... 16
3. COMPANY’S INTERNAL ANALYSIS ...................................................................................................... 17
3.1 Competitive Advantage.................................................................................................................... 17
3.2 Financial Analysis ............................................................................................................................. 25
4. COMPANY’S EXTERNAL ANALYSIS (PESTEL ANALYSIS)....................................................................... 29
i) Politic.............................................................................................................................................. 29
ii) Economic ........................................................................................................................................ 31
iii) Social .............................................................................................................................................. 32
iv) Technology ..................................................................................................................................... 36
v) Environmental ................................................................................................................................ 38
vi) Legal ............................................................................................................................................... 39
5. SWOT ANALYSIS ................................................................................................................................. 40
i) Strength.......................................................................................................................................... 41
ii) Weaknesses ................................................................................................................................... 42
iii) Opportunities ................................................................................................................................. 43
iv) Threat ............................................................................................................................................. 46
6. TOWS ANALYSIS ................................................................................................................................. 48
7. PURPOSED STRATEGIES TO SOLVE THE ISSUE. ...................................................................................... 53
Solution to First Issue: Insufficient manpower due to high turnover rate ............................................ 53
Solution to Second Issue: Standard of the hotel are not at par. ........................................................... 55
Solution to Third Issue: Maintenance Handled by Shangri-La Hotel ..................................................... 57
Solution to Fourth Issue: Complains on lack of entertainment provided on the beach front ............. 59
Solution to Fifth Issue: The service serve to customers takes long time and have to queues .............. 61
7. References ......................................................................................................................................... 62
8. APPENDICES ....................................................................................................................................... 63

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1. INTRODUCTION ABOUT SHANGRI-LA

1.1 Company’s Name

The Shangri-La was founded in 1971 with their first deluxe hotel in Singapore. Inspired

by the legendary land that taken from James Hilton 1933 novel which is “Lost Horizon”

where the name of Shangri-La enclose the serenity and services for which the hotels and

resorts are renowned worldwide. Today, Hong-Kong based Shangri-La and Resorts is

Asia Pacific’s leading luxury hotel group. We are also regarded as one of the world’s

finest hotel ownership and management companies. Shangri-La had owning and

managing over 100 hotels and resorts throughout Asia Pacific, North America, the

Middle East and Europe. Moreover, new hotels are under development in Australia,

Bahrain, mainland China, Cambodia, Malaysia ans Saudi Arabia.

Incorporated in 1971, there are variety unique brand from Shangri-La Hotels

(Malaysia) Berhad where the company and its subsidiaries own and operates deluxe

hotels and beach resorts. The Group’s hotel properties are Shangri-La Hotel Kuala

Lumpur, Shangri-La Rasa Ria Resort & Spa. Shangri-La Rasa Sayang Resort & Spa,

Golden Sands Resort and Hotel Jen Penang, along with an 18-hole championship golf

course and a Clubhouse in Pantai Dalit, Tuaran, Sabah. Its associated companies in

Myanmar are involved in the ownership and operation of a hotel, serviced apartments

and a commercial complex in Yangon.

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1.2 List of Board of Directors

TAN SRI A. RAZAK Tan Sri Abdul Razak Bin Ramli studied Bachelor of Arts (Hons)
degree majoring in Public Administration in 1971 from University
BIN RAMLI
of Tasmania, Australia. He started his career in the Policy Research
Board Chairman
Division of the Malaysian Prime Minister’s Department.

KUOK OON Madam Kuok Oon Kwong joined the Board on 14 November 1996
and was appointed Managing Director on 16 November 1998. She is
KWONG
the Chairman of the Policy Implementation Committee and in her
Managing Director
capacity as Managing Director she oversees the Group’s business
operations.

DATIN ROZINA Datin Rozina Mohd Amin was appointed to the Board on 1 June
1998. She sits on the board of a number of companies in the SHMB
MOHD AMIN
Group and has also been a member of the Policy Implementation
Executive Director
Committee since 1996. She has been with the Group for more than
thirty years and has held various senior corporate positions within
the Group before her present appointment as Executive Director.

DATO’ HARIS ONN Dato’ Haris Onn bin Hussein was appointed to the Board on 17
October 2006. On 30 March 2018 he assumed the role of Chairman
BIN HUSSEIN
of the Nomination and Remuneration Committee and became a
Independent Non-
member of the Audit Committee. He graduated from Cambridge
Executive Director University, UK, with a Bachelor of Arts Degree in Economics.

DATO’ SERI Dato’ Seri Ismail Farouk Abdullah was appointed to the Board on
23 June 1979. He is currently the Executive Chairman of the
ISMAIL FAROUK
Impiana Group of Companies, which is involved in the development
ABDULLAH
and management of hotels and resorts, travel and leisure, property
Independent Non- development and education.

Executive Director

DATUK Datuk Supperamaniam a/l Manickam was appointed to the Board on

3 January 2005. He holds a Bachelor of Arts (Honours) degree in
SUPPERAMANIAM
Economics from the University of Malaya. He has also served as a
A/L MANICKAM
member of several Government committees looking into

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 Non-Executive Director globalisation issues, especially those relating to trade policy and
negotiations.

DATO’ DR TAN Dato’ Dr Tan Tat Wai was appointed to the Board on 6 June 1995.
Dato’ Dr Tan is currently a Director of Southern Steel Bhd and also
TAT WAI
sits on the boards of NSL Ltd, Singapore and Maybank Philippines
Independent Non-
Inc., where he is the Chairman.
Executive Director

TAN YEW JIN Mr Tan Yew Jin was appointed to the Board on 17 October 2006.
He is a member of the Malaysian Institute of Accountants and the
Non-Independent Non-
Malaysian Institute of Certified Public Accountants, as well as
Executive Director
being a Fellow member of both the Certified Practising
Accountants, Australia and the Institute of Singapore Chartered
Accountants.

AHMAD REZA BIN In Encik Reza Ghazali was appointed to the Board on 28 February
2018 and on 30 March 2018 became a member of the Nomination
MOHD GHAZALI
and Remuneration Committee. During his career, he has gained
Independent Non-
extensive experience with various companies in the areas of
Executive Director hospitality, public relations and human resources.

GOH CHING YIN Mr Goh Ching Yin joined the Board on 28 February 2018 and on 30
March 2018 was appointed Chairman of the Audit Committee. In a
Independent Non-
career spanning 39 years, he has held various posts in the capital
Executive Director
market and finance sector, chiefly with professional services firms,
banks and the capital market regulator.

Table 1: List of Board of Directors

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1.3 List of Top Management Team

i) Senior Management

No. Position Name Profile

1. Managing Director Kuok Oon Kwong Singaporean, Female, Aged
70
2. Executive Director & Datin Rozina Mohd Malaysian, Female, Aged 57
Group Company Amin
Secretary

ii) Key Executives

No. Position Name Profile

1. Regional Financial Tan Keng Hock Malaysian, Male, Aged 64
Controller
2. Area Manager & General Manfred Weber Austrian, male, aged 47
Manager
3. General Manager, Elaine Yue Toy Hang Malaysian, Female, Aged 52
Shangri-La’s Rasa
Sayang Resort & Spa and
Golden Sands Resort,
Penang
4. Area Financial Controller G. Ravindran A/L M. Malaysian, Male, Aged 54
Govindasa My
5. Area Director of Human Christo Pher Sa Malaysian, Male, Aged 58
Resources – Industrial Kayara J
Relations (Malaysia)
6. Area Director of Human Ru By Gong Sie W Malaysian, Female, Aged 55
Resources (Malaysia) Mui

Table 2: List of Top Management Team

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1.4 Product and Services Provided

Shangri-la Hotel is an expensive hotel chain which offers a legendary and comfortable

stay in their resort and hotel. It also has big rooms with style decorations plus the

beautiful view outside the window. Each room consist few facilities such as Wi-Fi,

television, showers, wardrobe, telephone and balcony. There are four types of room

available such as Executive Suite, Premier Room, Executive Room and Deluxe Room.

Shangri-La hotel offers few facilities to their customers. For instance, like parking

facilities, non-smoking rooms, safe deposit box, clinic, hair salon and beauty salon.

Shangri-La Hotel also have business center to make conference and provides business

related services like meeting room, secretarial service and courier service. Besides,

Shangri-La Hotel also has special services including postal/courier services, laundry and

valet service, express check-in and check-out options, 24-hour room service and a

complimentary shoeshine service. Other than that, Shangri-La hotel also has babysitting

or child care, foreign exchange counter, gift shop, restaurants and bars.

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1.5 Location of Business

In Malaysia, Shangri-La Hotels have three state location at Kula Lumpur, Penang and

Sabah. They have an engaged in the operation of hotels, beach resorts, golf course,

clubhouse, property management and commercial laundry. The hotel properties include

location at Shangri-La Kuala Lumpur with 662 rooms, Second, Shangri-La Tanjung Aru

Resort and Spa, Kota Kinabalu.Third, Shangri-La Rasa Ria Resort, Kota Kinabalu with

499 rooms. Then, Golden Sands Resort, Penang with 387 rooms. Lastly, Shangri-La

Rasa Sayang Resort and Spa, Penang with 304 rooms and Hotel Jen Penang with 443

rooms.

At Kuala Lumpur, Shangri-La Hotels glimpse at the view from one of the 662

luxurious guest rooms and suites are perfectly highlights the hotel as a true urban

sanctuary. Surrounded by verdant gardens, soothing relaxation is at hand in the serene

spa while guests can keep on track with their fitness goals in the fully equipped gym. The

impressive resort-style swimming pool. In addition, the prime location close to business,

shopping and entertainment districts.

Next, Shangri-La Rasa Sayang Resort & Spa, Penang conveys a sense of history

and tradition, nestling beneath a verdant canopy of century-old rain trees. The expansive

tropical gardens, with an inviting lagoon-style pool complex as the focal point create the

perfect setting for unique social events and corporate retreats. The resort features 304

premier guest rooms. The location are more strategic because near with Penang

International Airport.

Then, Shangri-La’s Tanjung Aru Resort and Spa, Kota Kinabalu,Sabah is located

just 10 minutes away from the city. Then is a luxurious, tranquil retreat that provides the

perfect setting for an amazing tropical getaway and surrounds the customers in a lavishly

decorated suite inspired by Borneo's rich cultural heritage.

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 1.6 Company’s Structure
Company’s Structure for Shangri-La Hotel (Malaysia)

Tan Sri A. Razak Bin Ramli

Chairman

Kuok Oon Kwong

Managing Director

Datin Rozina Binti Mohd

Amin
Executive Director

Dato’ Haris Onn Bin Dato’ Seri Ismail Datuk Supperamaniam

Hussein Farouk Abdullah a/l Manickam
Non- Executive Director Non- Executive Non- Executive
Director Director

Dato’ Dr. Tan Tat Tan Yew Jin Ahmed Reza Bin Goh Ching Yin
Wai Mohd Ghazali
Non- Executive Non- Executive
Non- Executive Director Non- Executive Director
Director Director
Figure 1: Shangri-La Malaysia Organizational Chart
Each of the department Shangri-La hotel Malaysia have their important responsibilities

towards their organization. According in the annual report 2017, the organization structure of

Shangri-La hotel they are more to vertical structure organization. In this chart organizational, the

company should include all the franchise general manager to make an organizational charts like

strategic business unit. The strategic business unit is separate company, which is every manager

have responsible to the top management. All the managers communicate with their top

management.

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 Andrew den Oudsten
General Manager

Paul Loader
Resident Manager

Ngoh Ai Nium Param Sivasamy Michele Ma

Finacial Controller Dir. Of Human Resources Dir. Of Sales and

Marketing

Yusuf Yaran Daniel John France

Executive Chef Dir. Of Recreation

Michael Wang Ewan Yap Kim Yip Supratik Guha

Dir. Of Food and Dir. Of Engineering Dir. Of Rooms

Beverages

Figure 2: Tanjung Aru Resort and Spa Organizational Chart

Every level of management or department have their role in making an organization look

formal. In fact, if there is no management of a company it will not go forward or the

organization is not well managed. This chart organizational is based on Shangri-La hotel in

Sabah, which is Tanjung Aru Resort and Spa. The structure of the organization is more focuses

to top management, which is there is no lower management such as food and beverages division,

room division, and assistant accounting in the department. This flow of the chart is more to

vertical organizational structure, where only middle management and the top management only

communicate. Thus, the organizational structure have to involve the lower management to make

it well managed between all departments.

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1.7 Company’s Vision, Mission and Objectives

Every company have their own vision and mission in order to guide the operation of the make

the company a success. Shangri-La’s Hotel vision and mission are as stated below:

VISION

To be the first choice guests, colleagues, shareholders and business partners.

MISSION

Guests: To delight our guests every time with our Asian hospitality by delivering
consistent quality and value and creating engaging experiences that come straight from our
heart.

Colleagues: To create a working environment that motivates our colleagues to excel and to
achieve their personal career goals, and to make them feel involved and valued.

Shareholders: To deliver sustainable long-term returns for our shareholders through high-
quality operations, and to enhance and build on our relationship with our business partners,
suppliers and all other stakeholders.

Communities: To care for and enrich the quality of life of the communities in which we
operates.

Figure 3: Statement of Vision and Mission

Based on the vision and mission stated by Shangri-La Hotel Malaysia Berhad, it is shows

that all the vision and mission are slightly same with current situation. For example, to be the

first choice guests, colleagues, shareholders and business partners as their vision show that it is

something realistic compared to current situation. Shangri-La Hotel are really famous among

Malaysian and tourist from other countries. Besides, for those who are searching for the job

experience, Shangri-La Hotel might be one of their choices regarding to how famous Shangri-La

it is and incentive and benefits that they will earn.

Based on the Shangri-La Hotel missions toward guests, it is really same with current

situation which is delivering consistent quality and value toward customers. Shangri-La Hotel

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also encourages and motivates their employees to achieve their personal career goals and make

them feel appreciated.

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2. STRATEGIC ISSUES OR PROBLEMS IN COMPANY’S

CURRENT SITUATION

2.1 First Issue: Insufficient manpower to conduct daily operations

Shangri-La Hotel faces an issue which is insufficient of manpower to conduct daily operation.

The main problem of the manpower deficiencies is about the retention. The workers might feel

not happy working because of the poor management, pay, not enjoy the work itself and others.

They tend to find another job and would not stay in the company.

Hospitality is presumably a standout amongst the most labour-intensive businesses,

which is the reason it is critical to focus around creating people. To put in an exceptionally

short sighted way, if a business builds up its manager's well, pays respectably well and gives

more performance acknowledgment and development chances, workers will probably remain

and you are less inclined to have staff deficiencies.

Shangri-La Hotel could start offering training to their current representatives, with the

end goal to tailor them to fill current gap. This can mean preparing offered in-house, where an

educated worker imparts to others their significant ability. It's an extraordinary route for

organizations with a couple of good assets to build their incentive without consuming

excessively time and cash.

Other than that, Shangri-La Hotel should re-evaluate how to recruit new workers.

Without harming the organization, HR department could undoubtedly hire candidates with

80% of the right requirement and help them develop into the job. Or on the other hand, they

could take a stab at contracting candidates with all the correct skills; however ones maybe with

less experience than at first needed. If they broaden their hiring practice, and consider

transferable skills as referred to previously, they could discover excellent, motivated people

who could easier help your organization achieve its objectives.

Moreover, one of the least demanding approaches is by employing contingent workers.

With freelancer, experts, contractual workers and others, you can fill gigantic gaps in your task

rapidly and in a financially savvy way. Contingent workers are turning into an inconceivably
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 famous alternative for some, thinking about their expertise, accessibility and adaptability,

which enables them to work inside any time frame, spending plan and project.

2.2 Second Issue: Standard of the hotel are not at par.

The second issue faced by Shangri La is the standards of the hotel staff not on par. With the

increasing challenges the hotel sector is facing globally and the escalating demand for tourism

products and services, especially in the emerging markets, there is urgent need for players in

the region to offer high quality performance standards to survive (Essay UK, 2013). Since the

demand are kept increasing, Shnagri-la facing the issue of fulfilling the various and variety of

customers demand. This has led Shangri-la to hire new employee to ensure that the running

business are running smoothly and might be even better as well as able to fulfill customers’.

As stated, because of insufficient workers, Shangri La has to hire foreign workers in

order to balance up the workforce. Foreigners on the other hand are usually hired from third

world countries because of their low cost(Essay UK, 2013). This in return has taken toll on

the overall performance of the company. This is because, the hired workers most probably did

not have any proper education or qualification. Thus, they are not really exposed and know

the job well which will reflect the company’s performance as well as reputation. For instance,

if the new hired employee did even know how to treat the visitors in the hotel, it will directly

affect them.

2.3 Third Issue: Maintenance Handled by Shangri-La Hotel

The third issue is about the maintenance handled by Shangri La. As we know, Shangri-La

Hotel Berhad is engaged in the operation of hotels and beach resorts, a golf course and

clubhouse, property management and investment and commercial laundry. All facilities

provided needed a lot of maintenance once they are damaged or in order to make sure its

quality still in good condition especially in the field of golf courses and clubhouse,

maintenance is the upmost important.

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 Logically, all the facilities provide by Shangri-La Hotel are obviously needs to get a

special care because all these facilities will be used by their customers. Just because Shangri

La Hotel Berhad is a five star company, they should be able to improve their maintenance and

achieve excellence. As stated, maintenance is important in the hospitality trade as it reflects

the service provided by Shangri-La to their customers. It will give a big impact toward

customer satisfaction.

The issues arises is about cost of the maintenance. The more facilities provided means

that the higher the maintenance cost (Hitesh Bhasin, 2018). Maintenance cost is obviously

one of the Shangri-La Hotel’s expenses. It is including the cost of trains their employees on a

regular basis. In order to maintain their financial performance, they need to control total of

expenses that they did. The problem is there is several facilities that relatively have high cost

maintenance. For example, maintenance cost for golf courses, swimming pool, gymnasium

and others. So, Shangri-La Hotel need to take several actions in order to cut the maintenance

cost.

2.4 Fourth Issue: Lack of entertainment provided on the beach front

by Shangri-La Hotel

Services provided by the hotel is the main factor that will give huge impact on guest’s

perceptions and satisfactions. Unfortunately, based on the some feedback and reviews

everyone stated that the, Shangri La Hotel Berhad has received complaints on the lack of

entertainment provided on the beachfront which is also one of the issue faced by Shangri La

Hotel.

Shangri La Hotel engages in beach resorts, such as in Batu Ferringhi and one at Sabah

which is the more popular ones customers to come. Based on the reviews of the hotels, the

beach itself is already amazing to enjoy and hotel is one of the best that customer have stayed.

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 Then, have a good service, good food and great ambiance but there is only a problem in terms

of only thing such as lacking is entertainment for night activities especially after dinner.

Some competitors have provide a more activities or benefits in their hotel so it is more

following their needs and customers satisfaction. As tourism becomes more and more

common, the demands of the tourists and customers change. Shangri La Hotel must take an

action of any complaints from customers and resolve immediately because if the company

could not solved its can be a weakness to the company and can affect the reputation of hotels.

Customer perception were important thing that we must looked in order to make sure

they got the value proposition that you already promised. Guest’s demands have increased

significantly so accommodation services have to follow through. Nowadays, most guests

choose their hotel or other accommodation form not only with the accommodation in mind.

Additional services and facilities have a great impact on the decision making purchasing.

2.5 Fifth Issue: The service serve to customers takes long time and

have to queues

This issue is locate at Rasa Sayang Resort and Spa which is at Penang. Issue is the service

that want serve to customers it is take long time and have to queues. Giving the bad

experience to customers will make company suffer. Their customers felt unsatisfied with the

service restaurant that they provide. Customers want something that's easy and it's quick to

get. This is one of the needs and want from their customer request to improve in terms of

serving customers at restaurant. Giving a bad service will make an image of the company to

be affected. This will further reduce the company's revenue and profits. Customer service

should be treated with care so customers do not run away.

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3. COMPANY’S INTERNAL ANALYSIS

3.1 Competitive Advantage

As for competitive advantage, we have chosen Marriotte Hotel and YTL Hotel as the

competitor for Shangri-la in order to do the competitive advantage of Shangri-la. This

analysis are carried out according to few criteria to shows the company’s performance and

situation which will reflect the company’s competitive advantage.

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CRITERIA SHANGRI-LA HOTEL HILTON HOTEL MARRIOTT HOTEL CONCLUSION

I. Technology  Launching of Virtual  Launching of Virtual
Technology. A Technology. A
technology to make technology to make
customers have a real customers have a real
experience in exploring experience in exploring
the room virtually. the room virtually.
(Launch Date: on 28 (Launch Date: on 20
October 2015.) June 2017)
 Have an Artificial
Intelligence Robot to
communicate and give
tourist information to
customers that interacted
with it.
 Launching of Virtual As to compare with the technology
Technology. A adoption in these three hotel, three
technology to make of them are quite similar in term of
customers have a real offering their customers with new
experience in exploring updated technology. Somehow,
the room virtually. Hilton hotel has the most
(Launch Date: 9 advantage compared to Shangri-La
September 2015) and Marriott since they already
 Provide also a VR adapt with the IR4.0 features
Postcard where it enable which is AI.
travelers to travel around
the world by virtual
through the provided VR
technology.

II. Human  Shangri-La is an equal  Policy on cell phones  Concerns for employees As compared between Shangri-La,
resources opportunity employer which means employees starts with its “Guarantee Hilton, and Marriott in terms of
that embraces diversity in are allowed to carry them of Fair Treatment” human resource, the best

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 the workplace and be able to answer policy, an internal, application is more to Shangri-La
 Do not engage in or quick calls from family decentralized means for Hotel. It is because Shangri-La
tolerate unlawful member. all employees to express Hotel act that they are really
workplace conduct,  There is an online problems and have them serious defend the employees right
discrimination, or reservation portal that sets resolved in a timely in term of unlawful workplace
harassment aside unoccupied rooms manner. conduct, discrimination and
 Fair labour practices are for staff.  Meet employees need harassment. Besides, they also
applied across all such as uniform in order willing to recruit local employees
departments. to maintain high and people with disabilities which
 Shangri-La strongly standards of personal is really good for the community.
encourages local experience and
community employment cleanliness.
to contribute to the  Hands-on management
overall residents' quality which is staff manager
of life. stay in touch with the
 Aim to provide people operations and people the
with disabilities (PWD) support in order to
opportunities for upward understand and meet their
mobility in every local needs.
community
III. Marketing  Online marketing is trend  Hilton use online to attract  Marriot has launched The similarity of these hotels on
Strategy to promote Shangri-La customer by features their their own website and how well their market is they

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 hotel by website such as own website and send all extensive that provide a using online marketing as their
booking.com and the information into their clear information. market strategy. More advantages
agoda.com websites.  The website had a guide to Hilton group which is they
 Customer are more likely  Hilton do a promotion by for customer to book provide their own websites, they
face-face at the counter direct email, online using internet. do a direct email on booking to the
because they can get a advertisement on internet,  Marriot does not use customer, they use social media as
real information. by text messaging on direct mail campaign their platform to capture the
 Positive word from the mobile phone as well. because they seem more youngsters nowadays and create
counter help them offer a  They also do costing and unefficient. their own blog for customer to
promotion as satisfied advertisement through viral in the real situation which is
customer will social media from give a better feedback to the
recommend to others Facebook, twitter etc. company.
customer.  Other than that, they also
 Their target customer are prepare a platform for
more to business viral marketing which is
travelers for coming to blog where customer viral
their hotel. when they really in the
situation to confront other
customer to come Hilton
Hotel.
IV. Strategy –  The brand of Shangri-La  Some of the products that  The main products and All three hotels offers same
hotel is a five star luxury the hotel offer that makes services offered by services like restaurant and lounge

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 Differentiation hotel and typically target it unique from other hotel Marriott group of hotels but only Shangri-La which offers
market comes from the companies include are the hotel groups, different approach. Shangri-La is
higher income busy conference facilities, resorts, hotels, and the most of five stars hotel that
travelers. It is located in swimming pools, retail hospitality Management provide ocean or lake view.
premier city. services, food and Company and boutique Shangri-La also has private spa
 CHI Spa service of beverages, restaurants hotels. Accommodation, service to their customers.
Shangri-La Hotel is a and lounges among F&B and leisure services
unique offering to the others. are major products from
customers where they get  The company has grouped Marriott hotels. The main
access to the finest its products into three brands offered by
selection of oil and bath levels so as to become Marriott hotels are full-
accessories. The spa unique among its service lodging, select-
service offers competitors. Such service lodging,
personalized accessories standards include core extended-stay lodging,
to the customers. products, supporting timeshare and Great
 The most of five star products and facilitating Americas Park.
Shangri-La hotel and products.  The core service of
resorts provide an ocean Marriott hotels is to stay
or lake view to their in the market by
customers. providing the lodging
 Spas at Shangri-La services. For the core
provides private spa suite services to be utilized by

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 and help the traveler the customers, additional
relaxing and restoring the services are also
balance to mind and body required. The supporting
services may include the
check-in services and
facilitating services.
V. Strategy - Cost  Fixed prices in the  One of the Hilton  Marriott have segment As compared between
Leadership competition of Worldwide to make a their price according Shangri-La, Hilton, and
banqueting market sustainably live is reduce brand of the hotels. For Marriott in terms of cost
 Increased yields coupled energy consumption, SpringHill Suites hotel at leadership, the better
with tight operating cost reduce carbon an upper-moderate price, strategy is more to Marriott
control led to food and consumption, reduce while Fairfield Inn and hotel. Because Marriott
beverage profits by 10% waste output, and reduce Suites they provide an give segmentation to their
to RM4.821 million water consumption to inexpensive. customers according rate of
compared to RM4.376 make a cost savings.  The company has income, and the company
million in 2016.  Hilton Worldwide can reduced operating costs reduce the operating cost
continue this strategy with through various means towards more to green
the Hampton Inn brand, including green building, environment.
aiming at providing waste reduction, and a
customers with the best greener supply chain.
value.
VI. Strategy - 1) Shangri-La Hotels has 1) Unveiled Connected 1) The Marriot Hotel As compared between Shangri-La,

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 Innovation extended its global Room, a first-of-its-kind, launched a redesigned Hilton, and Marriott in terms of
partnership with Ingenico high-tech room that enables Marriott app in January, innovation. Shangri-La are more
Group, with Ingenico guests to personalize and which allows guests to advanced because enhancing the
helping to integrate native, control every aspect of their communicate directly with customer experience through
in-app payment functionality stay from the Hilton Honors hotels about their preferences technology and creates a seamless
into Shangri-La’s next- app. before and during their stays, online to offline journey. The hotel
generation mobile app. and use their smartphones as represent the pinnacle in luxury
 With the new 2) Scaled the industry-first room keys at more than 500 and customer service, and they
Shangri-La mobile Digital Key technology and properties. understand very well that the
app, guests can more its room selection features to payment experience is an integral
easily book rooms, 352,000 hotel rooms in more part of how their guests perceive
access mobile check- than 2,500 hotels worldwide. their relationship with the
in and check-out, company.
manage loyalty
points and redeem
rewards.
 With Ingenico
Connect, Shangri-La
can accept a wide
variety of payment
methods directly
from within the app,

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 with no need for
redirects to scheme
pages
2) Shangrila Hotel
announced the
integration of virtual
reality (VR) experiences
into its worldwide hotel
sales efforts
Table 3: Competitive Advantage

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3.2 Financial Analysis

NO. RATIO 2015 2016 2017 RATIO INTERPRETATION

1. Current Ratio 0.52 0.66 0.82 The current ratio provides investors insight as to whether a company has the
ability to generate enough cash to pay off all debts should they become due to
simultaneously. For FY2017, current ratio is 0.86, 0.71% for FY2016 and
0.59 for FY2015. It means that the Shangri La had more effectively on current
assets that has it disposal to pay off its obligations. It reflects that the
company are able to generate enough cash to pay off all debts because the
ratio shown an increase in number from 2015 till 2017.

2. Quick Ratio 0.52 0.66 0.82 The acid test ratio or quick ratio it is measure the liquidity of the Shangri La
Hotel by show from 2015 to 2017 its ability to pay off their current liabilities
with quick asset. If Shangri La Hotel has sufficient assets to cover the current
liability, the firm will be able to pay their obligations without having to sell
any long-term assets or capital. Higher quick ratios are better for companies
as they indicate there is quick assets than current liabilities. As the calculation
above shows that for 2017 the quick ratio is 0.82, for 2016 is 0.66, and 2015
is 0.52. This means that, Shangri La Hotel able to pay off all current liabilities
with quick assets and still have some of the remaining quick assets.

3. Cash Ratio 0.6205 0.4672 0.5229 If the cash ratio is under 1, this implies that the company won't have enough

25 | P a g e
 cash on hand to pay off current liabilities
4. Profit Margin 57.29% 48.80% 35.32% This show that Shangri-La Hotels, in accounting sense, generates a decreasing
Analysis amount in profit for every dollar in sales.
5. Return on Assets 3.66% 6.78% 6.78% Based on the ratio calculated, it shows for every year dollar of assets, Shangri
La Hotel generates increase percentages for the three consecutive years.

6. Return on Equity 31.424 19.315 19.315 Based on the ratio calculated, it shows that the percentage of profit generated
from the money invested by shareholders are keep reduce for the three
consecutive years.

7. Debt Ratio 0.197 0.197 0.202 The debt ratio is a solvency ratio that measures a firm's total liabilities as a
percentage of its total assets. Company with higher levels of liabilities
compared with assets are considered highly leveraged and more risky for
lenders. For Shangri La in FY2017, the debt ratio was 0.202, 0.206 in
FY2016 and 0.197 in FY2015. Through analysis, the debt ratio of 0.5 is often
considered to be less risky. Therefore, there are no issue for Shangri La to
implies on loan because it shown that they able to pay back.

8. Debt-Equity 0.21 0.23 0.25 The debt to equity ratio shows that the percentage of financing the company
Ratio originates from creditors and investors. However a higher at the debt to equity
ratio indicates that more lender financing, in other words is a bank loans
which used from investor financing that is refer to shareholders. According to

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 the annual report from 2015 to 2017 there is nothing much different between
the year 2015 shows that 0.21, while in 2016 there is 0.23 and 2017 the debt
to equity ratio shows 0.25, these all means that there are below than 0.5
meaning there are half of many liabilities from equity. A lower debt to equity
ratio usually there are less risk compare to higher debt to equity ratio.

9. Fixed Asset 0.11 times 0.112 times 0.17 times With this ratio, it shows that for every dollar in fixed assets, Shangri La
Turnover Hotels generated increasing amounts in sales.

10. Operating Cash 110852 129273 134669 Their cash flow are keep increasing for the latest three years
Flow/Sales Ratio

11. Cash Flow 0.521 0.479 0.595 Based on the ratio calculated, it is shows that Shangri-la are able to cover it
Coverage Ratio debts by using their earnings at quite lower percentage and for the last three
years, the percentage shows the reduces of their ROE which indicate that the
ability of Shangri-la to cover it debts by their earnings are keep declining for
the latest three years

Table 4: Financial Analysis

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 Summarization of Ratio Analysis

Quick Ratio Return on Equity Debt-equity ratio Cash Flow Coverage

1.00 Ratio
0.80 Debt-equity ratio
2017 1
0.60 0.26
0.40 2016 0.25 0.5
0.24
0.20 0.23 0
2015 0.22
0.00 0.21 2015 2016
0 10 20 30 40 0.20 2017
2017 2016 2015
0.18
Quick Ratio Column2 Column1 Series 1 2017 2016 2015 Series 1 Column1 Column2

Figure 4: Graph on Financial Rati

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4. COMPANY’S EXTERNAL ANALYSIS (PESTEL
ANALYSIS)

SOCIAL TECHNOLOGY

ECONOMIC ENVIRONMENT

POLITIC LEGAL

Figure 5: PESTEL ANALYSIS

i) Politic

2020 Year Visit to Malaysia

The year 2020 is selected as Malaysia Visit Year or Visit Malaysia Year 2020

following Malaysia will host many international events. It is involve the Asia Pacific

Economic Cooperation (APEC), the International Conference on Islamic Thoughts

and the Second Civilization (WCIT) and Commonwealth Heads of Government

Meeting (CHOGM). According to former Malaysian Prime Minister Datuk Seri Najib

Razak, said the tourism sector is a revenue-generating economy in the country. The

prove he said, the World Tourism Organization reported in 2016, Malaysia is the 12th

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 most visited country by travelers from around the world. Moreover, in 2017 the GDP

of tourism industry is a key contribution for the economy that create 14.9% of GDP or

RM 201.4 billion. The government will look forward for the tourism industry in Arts

and Culture’s that government target 30 million foreign tourist contributing RM 100

million to the economy 2020. For the 2018 budget the government allocates RM 2

billion to the SME Tourism Fund, the Small and Medium Enterprises corporation as a

loan to tour operators by providing two percent interest rate subsidized incentives. In

addition, an allocation of RM1 billion to the Tourism Infrastructure Development

Fund is given as an easy loan.

The government will also provide RM500 million for tourism development

and promotion programs through tourism infrastructure, homestay and eco-tourism

programs. Which is, eco-tourism they want to sustain the based on nature and has

sufficient value to be used without affecting its original source. Like Shangri-La they

have green environmental awards, which means they are sustaining the environment.

Other than that, the government also makes the e-Visa regional hub expanded to

facilitate visa applications worldwide, especially to expatriates, foreign students and

the Malaysia My Second Home program.

Provision of Budget for Boosting the Tourism Industry

For the budget 2019, the new government want to boosting the tourism sector in

Malaysia, which is the government will allocate RM 100 million that matching the

grant basis for the private sector with the link for promotional and marketing

campaigns to expand or increase the number of tourist to Malaysia. Besides, the

government also will provide tax-free facilities for Penang’s at Swettenham Pier in the

form of duty-free shops to accommodate for its rapid increase the cruise tourism to the

country.

30 | P a g e
 ii) Economic

Increasing Household Income

Economy performance in Malaysia also can give a big impact to Shangri-La Hotel

Malaysia in term of performance and profit gain by the company. There are several

issues in term of economy in Malaysia that would effects Shangri-La Hotel. Firstly,

the increasing in household income which is the minimum wages stated by the

government increase to RM1 100. It is opportunity for the company to attract more

customers. It is because when the power of buying more tend to the customers and

their ability to afford rises, so that the company can gain more profit. It will be the

same happens if household incomes are lower, there will be less spending occur and

company will feel the impact too (Investopedia, 2018)

Lower Foreign Exchange Gains Due to Depreciating Currency

There is some time that our currency values are going down. It is because the currency

is something that keeps changing time to time. When Ringgit value are down, the

customers who are from other countries tend to spent their money to Malaysia

company in order to get a cheaper price compared to their currency. It will be the

same happens if other countries currency goes down, so that the customers from other

countries will avoid to spend their money to Malaysia Company and prefer to stay at

their country because it will make them at disadvantage.

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 iii) Social

Increases of Tourist at Malaysia

Social factor make the future look very good for Shangri La Hotel because number of

people planning travel has increased by 13% in Asia. Approximately ,tourist arrivals

increased by 4.0% to 26.8 million tourists in 2016, while spending tourists increased

by 18.8%, contributing by RM82.1 billion to national income. Improvement this

tourist income is due to the tourists stay longer in Malaysia. The cultural changes that

could impact Shangrila hotel have increased numbers of Chinese and other Asian

travelers .Populations in the China and India that are growing older could increase the

demand for certain kinds of travel experiences, such as packaged tours and luxury

which has also benefitted the hotel industry. That means there are more travelers

spending more money and willing to travel and pay more for the experience.

Asian Culture Standards

Shangrila hotel has been a good hospitality from a caring family. Shangri-La has

always believed in the unique characteristics encapsulated by Asian culture and

commitment to providing guests with distinctive Asian standards .The service enables

them to stand out amongst the competitor. This quality remains the cornerstone of our

reputation as a world-class hotel group.The slogan “Pride without arrogance” is of

particular importance to give a good image for them. They take pride in achievements,

while remaining outwardly humble. In striving to delight customers each and every

time they stay with Shangrila hotel, to aim to exceed expectations through consistent

quality and value in their products and services. That’s why they look for trendsetters

and professionals who are motivated by innovation and driven by achievement.

Lifestyle Changes

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 Malaysia have many racial groups such as Malays, Chinese, Indians, indigenous

groups and other Asian groups. According to the statistics of the Malaysian

Population and Housing census department majority of the population represent by

Malays (50.4%) and 26.0% of Chinese, 11.8% of the Indigenous, 7.7% of Indians and

1.2% of other racial groups symbolize the total population. When considering about

the religious back ground of the Malaysia, Islam is the official and widely extended

religion which represents 60.4% of the total population and 19.2% belongs to

Buddhism. Further as a result of multi-cultural and multi-racial country 9.1% of

Christians, 6.3% of Hindus and 5.0% of other religious people symbolize the total

population.

As a result of the booming of the Malaysian economy, most of the features of

the western culture highly affect to the Malaysian lifestyles. Many locals have started to

use English language as their major language and most of the western customs have

been welcome by the local teenagers such as clubbing, outings and hang around with

friends mostly in the bars and pubs. Many people of the Generation X, Dotcom

generation and Baby Boomers have adapted to busy continuous corporate lifestyle of

the Malaysia. But most of the Malaysians still value the importance of a family life and

highly concern about family members. Hotel industry is also expanding because of the

lifestyle changes. Many people and family’s seeks to spends their times alone when

they have free time and during that time also, the will seek to have holiday with their

family. A lifestyle change would be a change in disposable income. People that have a

lot of money to spend tends to go on a yearly holiday. They are willing to spend money

on their family to have precious time together. All lifestyle changes have shaped the

travel and tourism because of the changes in income and education.

33 | P a g e
 It is said that citizen that have a low income would not be able to spend time to

have holidays abroad. Recession also has affected the amount of money people have

today as many holiday planners and tour operators have had to decrease prices and

create better package deals which allow many people on low disposable income to

afford a holiday during tough times. This can either earn or lose the travel and tourism

sector a lot of money. Lifestyle changes are consider one of the strongest factor that

contributes to tourism industry improvement.

Religious Belief

Social factors can be defined-as the facts and individual experiences that could

influence the lifestyle, personality and attitudes of one's life. Religious belief is

considered as one of the weakest factor that affect tourism and Shangri La Hotel.

Tourism and religion can impact on tourist behavior; for instance, religion influences

the choice of destination, tourist product preferences, and the offering of religion related

opportunities and facilities to tourists.

Similar to other tourism subgroups religious tourism should be seen more in

the context of the current competitive environment, in which the tourism and hospitality

industries are constantly searching for new customer segments. In this context the

tourism industry often inhibits a competitive relationship, where tourists feel they have

no other alternative than to compromise on their spiritual beliefs in favor of a tourist

experience. In this case, Shangri La Hotel is a hotel that accept people from every

belief. They doesn’t have any barriers in accepting people to stay at their hotel.

Build Relationship through Corporate Social Responsibility (CSR)

34 | P a g e
 Shangri-la Hotel can be said as a company that is very good in term of the Corporate

Social Responsibility (CSR). This can be seen by looking at the CSR committee that

available in each of the Shangri-la hotels. By the by, the CSR committee are made up of

senior management of Shangri-la which shown that CSR activties are really matters for

this hotel. The existence of this CSR committee in Shangri-la is in order to oversee the

implementation of group policies and practice which regards to the environment

perfomance, employment, health and safety, community support as well as supply chain

management. Through this CSR committee in Shangri-la, it can help to ensure that

those CSR activies are done in a good manner since the CSR committee itself are

consist of all the senior management.

The company also provide a lot of services including prepare some basic needs

of customers in each room such as bottling drinking water, soap, shampoo, coffee

powder and others. For bottling drinking water, they will make sure it is purified. Based

on the company's action regarding water purification, it’s obviously show that Shangri-

la Hotel concerns about their customer's health.

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 iv) Technology

As the world are changing and adapting with the Industrial Revolution 4.0 (IR4.0) era,

Malaysia also have a direct effect and currently are moving towards this era. Since

adopting with the IR4.0 features in business are highly important, Government of

Malaysia has taking an action to enhance businesses in Malaysia to adapt with this

technological changes by integrating the IR4.0 features in their business. This is to

ensure that Malaysia are at par with the global technological changes. To make this

success, government of Malaysia has allocated some amount to encourage all the

business to adapt the IR4.0.

Therefore, this factor will also affect Shangri-la as they need to involve in

adapting their hotel to provide a better service by using the IR4.0 features. Based on

Forbes Technology Council, AI is the upcoming innovation poised to affect the

hospitality industry. Many businesses will need to be adopted to the intelligent

machine automation. Additionally, Gartner, a global research and advisory firm

providing insights, advice and tools for leaders in It. Finance, HR and many more,

predicts that one in five workers engaged in mostly non-routine functions will rely on

AI to do many of humdrum tasks associated with their roles.

One of the IR4.0 features that most suit to be implemented in hospitality

industry would be Artificial Intelligent (AI). In hospitality, AI will play an important

role because it is able to carry out all those traditional human functions at any time

throughout the day since it can performs intelligent behaviours by using computers or

machines.

There are several examples on how AI can be used in Hospitality Industry.

The first one would be In-Person Customer Service. It will be used to deliver in-

person customer service since it is able to deal with basic customer-facing situations.

As an example in real, Hilton hotel already have an AI robot named “Connie”. This

robot is able to provide information about tourist to customers who interact with it.

36 | P a g e
 The most impressive for this robot is, the ability of it to learn from human speech and

adapt to individuals. This means that the more this robot communicate with

customers, the better it will get.

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 v) Environmental

Green Hotel Awards

Among the hotel’s efforts to better the environment is the in-house recycling of the

hotel’s wet waste into organic fertilizer used to sustain the hotel’s landscape and

gardens. This form of recycling assists in reducing the need for sanitary landfill and

subsequently reduces the production of methane and ground water pollution.

Held every two years, the ASEAN Green Hotel Award is a form of

appreciation and recognition towards tourism stakeholders for adopting the ASEAN

Green Hotel Standards into their services. Environmental issues are the main aspects

for the assessment, as stipulated in the ASEAN Green Hotel Standard document.

Criteria and essential requirements include environmental policy and hotel operation

activities, utilization of green products, cooperation with local community and

organizations, human resources development, solid waste management, energy

efficiency, water efficiency, water quality management (indoor and outdoor), noise

pollution control, waste water treatment and management, and toxic and chemical

substance disposal management.

38 | P a g e
 vi) Legal

SST Sales & Service Tax (SST) has biggest impact to the hotel industry. Malaysia

started imposing a tax of 5 per cent and 10 per cent on the sale of goods, and a 6 per

cent levy on services with effect from Sept 1. The implementation of SST had

increase the price of goods and services. Thus, with the increasing tax from

government it will make hard for the citizen to go travel anywhere. This will also

burden the hotel because with the higher price of goods they need to bear. For

example, before SST applied the price of mirror is RM15 but after that the mirror

price’s become RM40. That is a price for one mirror, but how about a hotel that has

200 rooms which needs 200 mirrors this will be costly to the hotel.

Next, the government has proposed that the minimum wage be raised to RM

1,100 nationwide from Jan 1, 2019. Finance Minister Lim Guan Eng said this was

among the measures being adopted by the government to help the people cope with

the rising cost of living. “We understand the need and importance of ensuring that

salaries can cope with the rising cost of living, hence the government has proposed

that the minimum wage be raised to RM1,100 nationwide from Jan 1, 2019,” he said

while tabling the 2019 Budget in the Dewan Rakyat.

Besides that, Minister of Finance, Lim Guan Eng announces that it will

continue and improve the Bantuan Sara Hidup (BSH) to the lowest 40 percent

income households by channeling the allocation more seriously. The BSH rates

determined for the monthly household income issue of RM 2,000 and below are RM

1,000. While for households with monthly income from RM 2,001 to RM 3,000 and

below, they will receive a total of RM750. Monthly income from RM 3,001 to RM

4,000 will be given a grant of RM500

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5. SWOT ANALYSIS

Strength Weaknesses
1. The service Shangri-La Hotels & Resorts have an excellent 1. Shangri-La has lack on promotion where they use traditional
service quality. way which is greeting on front end.
2. The environment they provide quiet atmosphere. 2. High cost maintenance
3. Shangri-La also did CSR towards the environment. For 3. Specific to Asia primarily
instance “Orangutan Rehabilitation Support Programme”. 4. Focus on high standard customer
4. Got Gold Award for a 5-Star Hotel in Kuala Lumpur at the
Malaysia Tourism Council Awards 2017.
5. Fair labour practices are applied across all departments
6. Provide people with disabilities (PWD) opportunities for
upward mobility in every local community

Opportunities Threat
1. Exponential growth in the tourism sector 1. Implementation of new tax system Sales and Service Tax
2. Ability to expand during festivals in future years that replace GST.
3. Long term strategic with Corporate Social Responsibility 2. Increase in the number of competitors
(CSR) 3. Economic Downturns
4. Changing market trends of hospitality industry
5. Government increase minimum wage from RM1000 to RM
1100.
6. Government change BRIM to Bantuan Sara Hidup.
7. Shangri-La got ASEAN green hotel award from 2016-2018.

Figure 6: SWOT Analysis

40 | P a g e
 i) Strength

The strength of the company it is effective brand communication strategies unlike

competitors using features and facilities to attract customers, the Shangri-La hotel &

resort uses emotional attraction. The chain of hotels has relied on promotional

campaigns for promotions and most of their campaigns are closely related to nature

and showcase a fleet of loneliness, and proximity to luxury. In addition, the service

Shangri-La Hotels & Resorts is famous for its excellent service quality and customers

are given a lot of personal attention. Its restaurant decoration is imperial and

architectural inspiration and service quality is consistent across all its properties.

Besides, the service also provide ambience for their customers with quiet atmosphere.

The lush green forests, spacious rooms and magnificent views are the relief to

business travellers who usually stay in corporate class hotels.

Moreover, the company make a strong corporate social responsibilities to

taking care the environment for society. For instance, they did many on protection

habitat project, like “Orangutan Rehabilitation Support Programme”, taking care

species of birds, flora and fauna, and Turtle Care Project. Next, Shangri La Care for

People Project, which is they give support on training and skills, infrastructural

support, fund rising, make a sponsorship charity to the poor, make donation such as

blanket, towels, used uniform or cloth, cleaning the beach, this all they did CSR at

Rasa Ria Resort in Sabah, at which at the end it will bring successful outcome to the

company image. In addition, the strength have been proven which they received Gold

awards for a 5 Star Hotel in Kuala Lumpur at the Malaysia Tourism Council Awards

2017. Besides, they also willing to recruit local employees and people with disabilities

which is really good for the community. It is good for Shangri-La Hotel because it

show that they are very concern about the community and surely will give a good

impression toward the company.

41 | P a g e
 ii) Weaknesses

Shangri La has a bad effective brand communications strategies unlike

competitors using features and facilities to attract customers. Shangri La hotel

and resort uses traditional attraction where they keep use greeting only at front

end. They did not too advertising on media social compare with other hotels and

resorts. Next, Shangri La had problem on maintenance of facilities and amenities

which costly to them. The hotel also trains their employees on regular basis

which acts as a higher cost factor. These also will effect on profit that has been

get from business because the cost are not being organized well.

Other than that, Shangri La business view are limited to Asia-Pacific

where they limited to Asian markets only. In addition, the group expect when

the global brands plan to enter the market, it will lead to competition because

visitor coming from the west would prefer the brand hotels. Furthermore,

Shangri La hotels are more primarily positioned as the hotels giving best Asian

hospitality experience which limits their reach in Europe and American

Countries. Moreover, Shangri La also more focusing on high standard customer

such as business travellers. Malaysia is considered as upper middle income due

to arising of household income, educational level, lifestyle and customer buying

behaviour patterns. Therefore, the local citizen are tend to check in budget hotel

because of the focuses more too high income customer.

42 | P a g e
 iii) Opportunities

1) Exponential growth in the tourism sector

Tourism is a part of the profit industry of Malaysia. Exponential growth in the tourism

sector is amongst those Malaysia that play a significant role in improving and

expanding their tourism industry. That means there are more travelers spending more

money and willing to travel and pay more for the experience. Not only are local

tourists attractive towards the places of Malaysia but it also plays a crucial role by

attracting foreign visitors and thus contribute towards positively affecting the

economic growth of the nation. Studies have revealed that due to the development and

enhancement of tourism industry in this country, the number of tourists have

continued to increase over the period of time and indirectly tourism industry will

expand the economically of country. The shangrila hotel as an accommodation into

the tour package to attract a more customer to stay at Shangrila Hotel.Shangri-La is

strategically planned and executed to target every type of traveller, from business

travellers, individuals, couples or families. These will help Shangri-La to operate in

many segments of the hospitality industry across the world.

2) Ability to expand during festivals in future years

Besides that, Malaysia have many racial groups such as Malays, Chinese, Indians,

indigenous groups and other Asian groups. As Malaysian, we are celebrate a more

festivals in a year. The Shangrila Hotel can approach the best promotion or service for

customers with ability to expand during festivals in future years. Customers will gets a

experience and property respects local traditions and Asian culture in Malaysia.This is

a opportunity for hospitality industry may attract greater level of support and future

especially foreign tourism and business treveller are choose the luxury hotel to stayed.

43 | P a g e
 3) Long term strategic with Corporate Social Responsibility (CSR)

The Government of Malaysia has contributed to a positive CSR environment. Vision

2020 sets the foundation for Malaysia to become a developed nation by the year 2020

by creating a united country that has a caring and economically just society. To taking

on government challenges. The CSR activities by Shangri-La hotel it can help to

ensure that those CSR activities are done in a good manner and build a long

relationship with the social and governments. The existence of this CSR in Shangri-La

is in order to oversee the implementation of group policies and practice which regards

to the environment performance, employment, health and safety and community

support.

4) Changing market trends of hospitality industry

The opportunity Shangri La hotel can do is changing market trends. The trends in the

hospitality market are changing time by time. The customer is fussier but willing to

pay more for value-added services. This means that hotels by focusing more on

personalized attention can charge higher for their facilities.

Besides that, tourism is a growing industry globally, Shangri La hotel should

entry into new markets seems like the next step for them. Shangri La is a well-known

internationally so the foreign investors will be easy to cooperate with the hotels.

5) Minimum wage raised from RM1000 to RM1100 & Bantuan Sara Hidup for

monthly household income less RM4000

Both of are the incentives would be given to citizens based on budget 2019. Hotel

industry can take these as advantage to promote their hotel service as people have

extra money to go on vacation. They can also bring their family and relatives to go on

44 | P a g e
 vacation. This would generate more profit to the hotel industry. Shangri-La Hotel can

make discounts on special day like Labour Day and New Year to attract more

customers. People nowadays always take a fast look at discounted prices so that they

did not over their budget. Most of their wage is focused on paying bills, car loans,

house and tax.

6) Green Hotel Awards

Shangri-La got ASEAN green hotel award from 2016-2018. The company make a

clean environment, use green products, and taking care the air pollution to get the

good quality fresh air. In terms of human resource, the strength of Shangri-La Hotel

are Shangri-La Hotel act that they are really serious defend the employees right in

term of unlawful workplace conduct, discrimination and harassment.

45 | P a g e
 iv) Threat

1) Sales and Service Tax (SST)

Tax is necessary but it should not be simply applied when citizen are already

suffering due to the economic situation. The imposition of SST will badly affect the

business. Both local and foreign tourists would have to dig deep into their pockets if

the proposed SST of 10% was imposed on room rates. The foreigners already have

to pay RM10 tourism tax per room per night. With 10% SST for hotels with more

than 25 rooms, that is another charge where previously it was just 6% for GST. Now,

this is not the right time to impose such tax in the current economic climate and that

it would be a blow to the hotel industry of the 10% SST was implemented. This will

make tourist think twice before go to vacation in Malaysia because of the high tax

applied to them.

2) Increase In The Number Of Competitors

The competitions are the biggest threats to Shangri-La Hotel. It is because there are a

lot of new companies that always trying to get customer’s attention. So, the best

company will succeed to be customer’s choice. In order to compete with other

companies, Shangri-La Hotel needs to provide the better services and facilities to the

customers. It is definitely very hard because it needs to depend on the current

situation like economy and capability of workers.

3) Economic Downturns

Next, economic condition also influenced the performance of Shangri-La Hotel.

Shangri-La Hotels need to find the solutions in order to survive in bad economic

condition. More than many industries which is tourism industry is greatly affected

by economic downturns. So when the economy struggles, hotels are among injuries

46 | P a g e
 that occur between businesses and customers. In addition, foreigners are afraid to

travel to a country with economic problems and instability, so that in turn brings less

income to the whole tourism industry. Generally, the image of Shangri la Hotel is

weakening in many hotel industry that provide almost same service and quality,

which in turns results in fewer tourists coming to Shangri la Hotel. Customer

represent the fuel for any tourism industry, without customers and travellers, these

businesses would not make any money.

47 | P a g e
6. TOWS ANALYSIS

1) STRENGTH – OPPORTUNITIES (SO)

 S1 O11 = Excellent service quality and exponential growth in the

tourism sector

Excellent service quality is one of Shangri-La Hotel strength. Regarding exponential

growth in tourism sector, Shangri-La Hotel can be suggested to do a lot of effective

promotions about their excellent service quality through various alternatives such as

social media, newspaper, television and others. So that the community will

acknowledge about their strength in term of service quality and also attract more

people choose their product that they offered.

 S6 O3 = Provide people with disabilities (PWD) opportunities for

upward mobility and long term strategic with Corporate Social

Responsibility (CSR)

Shangri-La Hotel have an advantage when they provide people with disabilities

(PWD) opportunities for upward mobility in every local community. Since there are

opportunities regarding long term strategic with Corporate Social Responsibility

(CSR), Shangri-La Hotel can be suggested to establish more CSR programmes and

activities toward people with disabilities (PWD) in order to concern about their

welfare and guaranteeing the sustainability of their lives.

2) STRENGTH-THREAT (ST)

 S1 T1 = Excellent service quality and new tax system Sales and Service

Tax that replace GST

48 | P a g e
 Shangri-La already has a well-known brand in the market, as well as serving their

customers with the best quality. However, the new government had introduced the

SST which is Sales and Service Tax that replace with GST. This SST will affect the

company performance and profit. Moreover, customer can feel the raise in terms of

price that hotel provide to them. But from this SST, Shangri-La hotel can give the

best service or improve their service more than others competitors. Other than that,

not all items or service include in the SST, like some of food have 0% and some of it

will be charge 5%, it is less than previous GST with 6%. This will give opportunities

that given to Shangri-La to serve food and beverages to their customers. Besides, the

management have to keep in touch with their past and present customers to keep

long term relationship with them.

 S6 T2 = Provide people with disabilities (PWD) opportunities for

upward mobility and increasingly the number of competitors

Furthermore, the combination of giving opportunity to people with disability work or

give training to them is actually have a competitive advantage to Shangri-La, which

is not all hospitality industry accept or receive people with disabilities to work with

them. For instance, if customers have disability like deaf, mute, blind, and can’t walk

by using wheelchair. This disabled worker can help them or those with disabilities as

well. This handicapped workers has been given training and skills in handling this

issue and problem that occur. Other than that, with this strategy the company will

also get a good image.

 S3 T3 = Shangri-La did CSR towards environment and economic

downturn

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 Shangri-La had done many corporate social responsibility project towards

environment. However, the economic nowadays are not stable. For Shangri-La they

can create more activities with the local people and do more CSR project for the

future to enhance their strategy, which is want to create awareness to their prospect

customers. From the economic downturn it is a bit of a giving benefit to the Shangri-

La.

3) WEAKNESSES-OPPORTUNITY (WO)

 W1 O1- Shangri-La has lack on promotion where they use traditional way
which is greeting on front end.

Shangri-La Hotels has a poor online promotion through the internet to gather
information, receive bookings and reservations, buy supplies and communicate
with potentials guests. They seldom use online because their target market usually
people who like to reservation at the counter without using media social.
Regarding exponential growth in the tourism sector , many hotels nowadays are
developing their mobile user friendly websites and mobile apps with virtual tours,
area information, local attractions, and navigation and reservation emphasis we
can suggest that Shangri La Hotel can actively develop promotion through various
alternatives such as social media, website and others. .For example the sites such
as Trivago, Agoda, Travelgo and so on, have provided hostels with unprecedented
access to new customers. Shangri La Hotel relies strongly most of marketing
strategies on Google advertisements and it also uses Booking.com and hotel.com
as a secondary reference. The increasing use of making reservations over the
internet has also helped many hotels experience strong revenue growth.

 W4 O5 =more focusing on high standard class or customers and

government increase minimum wage from rm1000 and rm1100 and

exponential growth in the tourism sector

Shangri La Hotel have weaknesses based on income segmentation where is the

hotel are more familiar with business traveller. Therefore, the local citizen in

50 | P a g e
 medium class are tend to check in budget hotel because the Shangri la hotel

focuses more too high income customer. Therefore, regarding the government

increase minimum wage from rm1000 and rm1100 to Malaysia people. They can

saving their money for vacation and the hotel can develop a special packages for

medium class with according their budget. Shangri La should planned and

executed to target every type of individuals, couples or families. These will help

Shangri-La to operate in many segments of the hospitality industry across the

world.

4) WEAKNESSES-THREATS (WT)

 W1 W3 T2 = Shangri-La has lack on promotion where they use

traditional way which is greeting on front end, Specific to Asia
primarily and Increase in the number of competitors

Shangri-La Hotel must improve their method of advertising along with the

technology. Their competitors had already use social media like Facebook to

promote their hotel. Shangri-La has to differentiate their advertisement to make it

stand out from other competitors. Shangri-La should open branch out of Asia

Pacific to make them globally well-known hotel.

 W2 T1 = High cost maintenance and Implementation of new tax system

Sales and Service Tax that replace GST.

Shangri-La Hotel could reduce their maintenance cost and try to minimize their

cost. New tax system already make the hotel price higher , to gain more profit they

need to minimize maintenance cost and other costs.

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  W4 T3 = Focus on high standard customer and Economic Downturns

Shangri-La Hotel has to vary their target market to middle and low standard people.

So that, people can accesses their service according to their budget. Shangri-La also

can lower the price or make promotion so that people still can use their service even

though the economy is down.

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7. PURPOSED STRATEGIES TO SOLVE THE ISSUE.

Solution to First Issue: Insufficient manpower due to high turnover

rate

Shangri-La Hotel faces an issue which is insufficient of manpower due to high turnover rate.

The main problem of the manpower deficiencies is about the retention. The workers might

feel not happy working because of the poor management, pay, not enjoy the work itself and

others. They tend to find another job and would not stay in the company.

Hospitality is presumably a standout amongst the most labour-intensive businesses,

which is the reason it is critical to focus around creating people. To put in an exceptionally

short-sighted way, if a business builds up its manager's well, pays respectably well and gives

more performance acknowledgment and development chances, workers will probably remain

and you are less inclined to have staff deficiencies.

Shangri-La Hotel could start offering training to their current representatives, with the

end goal to tailor them to fill current gap. This can mean preparing offered in-house, where an

educated worker sharing to others their significant ability. It's an extraordinary route for

organizations with a couple of good assets to build their incentive without consuming

excessively time and cash.

Other than that, Shangri-La Hotel should re-evaluate how to recruit new workers.

Without harming the organization, HR department could undoubtedly hire candidates with

80% of the right requirement and help them develop into the job. Or on the other hand, they

could take a stab at contracting candidates with all the correct skills; however ones maybe

with less experience than at first needed. If they broaden their hiring practice, and consider

transferable skills as referred to previously, they could discover excellent, motivated people

who could easier help your organization achieve its objectives.

53 | P a g e
 Moreover, one of the least demanding approaches is by employing contingent

workers. With freelancer, experts, contractual workers and others, you can fill gigantic gaps

in your task rapidly and in a financially savvy way. Contingent workers are turning into an

inconceivably famous alternative for some, thinking about their expertise, accessibility and

adaptability, which enables them to work inside any time frame, spending plan and project.

54 | P a g e
Solution to Second Issue: Standard of the hotel are not at par.

Since the issue of standard of Shangri-la’s staff are not on par due to the insufficient workers

and less expertise workers that been hired from third world countries has affect the overall

performance of Shangri-la. Thus, this issue need to be strategically solved out.

The strategy that can be implemented by Shangri-la to solve the issue is by Shangri-la

need to improve a platform to hire the qualified employee for their hotel. Currently, Shangri-

la does have the job application platform in their websites in order for people to apply job in

their hotel. But then, the website platform might be not strong enough to notify the people to

apply for the job since they need to specifically browse into the website to know about it

instead of knowing it directly without they need to search for that. Thus, it is recommended

for Shangri-la to have the advertisement on the available job for their hotel to attract people to

seek for the job. The job advertisement are not only can be published in Jobstreet or another

job searched websites but then it can also been advertise through all those social media such

as Instagram, Facebook, Twitter and many more.

Besides, Shangri-La Hotel have an excellent service quality. Regarding exponential

growth in tourism sector, Shangri-La Hotel can be suggested to do a lot of effective

promotions about their excellent service quality through various alternatives such as social

media, newspaper, television and others. So that the community will acknowledge about their

strength in term of service quality and also attract more people choose their product that they

offered.

Additionally, doing advertising through this platform does not cost them much or not

involve a very huge amount for the information to be advertised. By doing this, the

information are more widely spread to the public since most of the people tend to access their

social media almost every day and almost been frequently accessed every day. Therefore, it is

easier to notify the public by using this platform since the information is directly come to the

55 | P a g e
public without they need to browse it in. Through this platform, they could reduce their less

expertise workers and no need to suddenly hire the workers from the third world countries

due to their insufficient staff because there is more applicants that has applied to their hotel

due to the social media platform.

To ensure that the applicants are qualify for the job in their hotel, they can put on the

information together with the advertisement for the applicants to know about the requirement

first before they apply for it. Otherwise, if the applicants are not qualified for the job, they can

conduct an interview to filter the candidates that really suit to their job in their hotel.

Furthermore, the issue of high cost of unemployment are really matter since it makes

the company to bear a higher cost for that. Undeniably, all companies want to minimize their

cost, but then when it cause this of issue to be existed, it can be solve by giving some training

to them. Usually, workers that has been trained by the company are able to perform their job

well. Thus Shangri-la might train all the new hired employees in order to ensure that they can

perform the job well and contribute in improving the overall performance of the hotel instead

of give an issue and negatives impact when they do not have such expertise to perform their

job. Therefore, by implementing this strategy, it will help Shangri-la to face the issue and

make Shangri-la workers at par.

56 | P a g e
Solution to Third Issue: Maintenance Handled by Shangri-La Hotel

Shangri-La Hotel offered a lot of facilities to their customers such as clinic, conference

facilities, parking facilities, swimming pool and others. The maintenance cost is obviously

high to handle as Shangri-La’s hotel and resort must be excellent to its quality for

accommodation. This will increase the expenses of Shangri-La Hotels and thus the price of

the hotel room will also increase. High cost maintenance can give a big impact to the

company’s financial position. So, regarding the issues faced by Shangri-La Hotel Malaysia

Sdn Bhd which is having high cost maintenance, there are several solutions that can be used

to solve the problem.

Firstly, Shangri-La Hotel should establish a policies stated that customers will

responsible for the maintenance cost for any facilities that they were damaged. This action

will decrease the maintenance cost by the company. So that the customers will use the

facilities wisely and decrease the potential of facilities damaged. If the customers against the

policies provided by the company, they automatically can be sued.

Secondly, the company should critically considered the facilities that customers really

need and popular among them. The facilities that customer barely used can be eliminated by

the company in order to cut the maintenance cost. For example, if the company have provide

bicycles as one of the facilities but it is barely used by the customers. So, it is reasonable for

the company to eliminate that particular facilities. It is surely can save the cost for

maintenance.

In order to strengthen company’s maintenance for future strategies, recruitment of

professional workers in maintenance area should be taken. Having the professional and

trained workers in maintenance area can increase effectiveness of maintenance service and

also can increase customer’s satisfaction toward service and facilities provide by the

company.

57 | P a g e
 Maintenance cost is strongly related to expenses of that particular company. In term of

financial performance, Shangri-La Hotel should make a critical planning on how to reduce

the cost. But at the same time, Shangri-La Hotel should also considered customer’s

satisfaction before taking any action regarding cutting the cost maintenance.

58 | P a g e
Solution to Fourth Issue: Complains on lack of entertainment
provided on the beach front

Based on the reviews of the hotels, Shangri La Hotel Berhad has received complaints on the

lack of entertainment provided on the beachfront which is also one of the issue faced by

Shangri La. Shangri La engages in beach resorts, such as in Batu Ferringhi and one at Sabah

which is the more popular ones customers to come. Based on the reviews of the hotels, the

beach itself is already amazing to enjoy and hotel is one of the best that customer have stayed.

Then, have a good service ,good food and great ambiance but there is only a problem in terms

of only thing such as lacking is entertainment for night activities especially after dinner

.Shangri La Hotel should enhance a solution to that matter with exponential growth in the

tourism night activities

. Furthermore, the excellent service quality is one of Shangri-La Hotel strength.

Regarding exponential growth in tourism sector, Shangri-La Hotel can be suggested to do a

lot of effective promotions about their excellent service quality through various alternatives

such as social media, newspaper, television and others. So that the community will

acknowledge about their strength in term of service quality and also attract more people

choose their services that they offered order to improve its business performance and enhance

its future competitiveness. For example, offering exclusive packages and offer to attract them

especially during they are stayed at hotel. Shangri La Hotel can do activities fire show for a

fun night at beachfront such as creating a social buzz and live music is an ongoing focus.

Customers will enjoyed their vacation.

By take an action of any complaints from customers and resolve immediately. This

hotel will become acquainted with its situations and be able to make the right decisions in the

future. Basically, Shangri-La Hotel determined to build their strong marketing capability and

cost performance, while improved with high service and product improvement. The entire

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hotel industry is witnessing a continual increase, influenced by the reviving economy and the

increased development of tourism industry.

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Solution to Fifth Issue: The service serve to customers takes long
time and have to queues

However, this issues have solution to improve their service to satisfy their customers. Which

is the company have to all information at their fingertips? But the truth is that not all customer

requests can be done immediately. They can be complex and require some follow-up. The

objective here is to decrease the amount of these follow-ups to a minimum and to make sure

the communication between you and the customer is accurate information. Rather than

spending time exploring all information from multiple sources, Shangri-La can use customer

service software to track all your interactions with customers. This gives you a detailed

perception or expectation from customer and can also view of the customer profile and allows

you to get direct on a case without a delay. The quicker you get information from the

customer is, the quicker you can identify the problem and can solve it.

Second solution is, the hotel must do research for service and they must learn from the

bottleneck. To reduce response time, they have to study when the peak hour to serve for their

customers. Every step have to do a research to it, so the management can handle it with

smoothly at the end. Besides, the management also can make the online food order system.

This strategy the management know how much quantity to make it for their customers.

As discuss in the TOWS analysis Shangri-La already has a well-known brand in the

market, as well as serving their customers with the best quality. However, the new

government introduced the SST, Sales and Service Tax replacing GST. This SST will affect

the company's performance and profitability. Moreover, customers can feel the price increase

provided by the hotel to them. But from this SST, Shangri-La hotels can provide the best

service or improve their service compared to other competitors. In addition, not all the goods

or items will include SST some products like food have 0% tax and some 5% this will give

opportunities to Shangri-La to improve in terms of serving customers food and beverages.

61 | P a g e
7. References
Bhasin.H. (2018). SWOT analysis of Shangri-La Hotels & Resorts. Retrieved on
November 22, 2018 from https://www.marketing91.com/swot-analysis-of-
shangri-la-hotels-resorts/

Essays, UK. (November 2013). Shangri La Hotels Business Analysis. Retrieved from
https://www.ukessays.com/essays/tourism/shangri-la-hotels-investment-
holding-company-tourism-essay.php?vref=1
Hazwan Faisal Mohamad. (2017). 2020 tahun melawat Malaysia. 2020 tahun melawat
Malaysia | Nasional | Berita Harian. Retrieved from
https://www.bharian.com.my/berita/nasional/2017/10/342977/2020-tahun-
melawat-malaysia

Hilton worldwide pursues low cost leadership and sustainability. (2014). Hilton
Worldwide Pursues Low Cost Leadership and Sustainability. Retrieved from
https://brittoncrafton.wordpress.com/2014/02/23/hilton-worldwide-pursues-
low-cost-leadership-and-sustainability/

Investopedia. (2018). What Are the Consequences of Income Effect?. Retrieved on

November 26, 2018 from

https://www.investopedia.com/ask/answers/041415/what-effect-does-income-
effect-have-my-business.asp

Shangri-la hotel (Malaysia) berhad annual report. (2017). Listed Companies - Bursa
Malaysia. Retrieved from http://www.bursamalaysia.com/market/listed-
companies/list-of-companies/main-market/

The Star Online. (2018). Hoteliers still in the dark on SST - Metro News |The Star
Online Thestar.com.my.
Retrieved 1 December 2018, from
https://www.thestar.com.my/metro/metro-news/2018/07/21/hoteliers-still-in-
the-dark-on-sst/
The Sun Daily (2018). Increase in minimum wage to take effect on Jan 1, 2019.
Retrieved 1 December 2018, from

https://www.thesundaily.my/archive/increase-minimum-wage-take-effect-jan-
1-2019-LUARCH576518

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8. APPENDICES

Calculation on Financial ratio.

Ratios 2015 2016 2017

1. Current Ratio
134,079 = 0.52 181,780 = 0.66 217,352 = 0.82
240,595 265,767 257, 517
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

2. Quick Ratio 181,780 – 6559 = 0.66

134,079 – 8242 = 0.52 265,767 217,352 – 5,343 = 0.82
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 − 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 240,595 257, 517
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

3. Cash Ratio
83,396 = 0.6205
𝐶𝑎𝑠ℎ + 𝐶𝑎𝑠ℎ 𝐸𝑞𝑢𝑖𝑣𝑎𝑙𝑒𝑛𝑡𝑠 84,413 = 0.4672 115,994 = 0.5229
134,393
𝑇𝑜𝑡𝑎𝑙 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
180,669 221,820

4. Profit Margin Analysis (65 406÷114 175) × 100 (63 229÷129 567) × (49 508÷140 182) × 100

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 = 57.29% 100 = 35.32%

𝑥100
𝑆𝑎𝑙𝑒𝑠
= 48.80%

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 5. Return on Assets (877,354+910384)/2= (910.384+954006)/2= (954006+988520)/2=

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒+𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠(1−𝑡𝑎𝑥) 1787738 932195 971263

𝑥100
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

ROA=65406/1787738 ROA= 63229/932195 ROA=49508/971263

X100=3.66% x100=6.78% x100=5.09%

6. Return on Equity

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 − 𝑃𝑟𝑒𝑓𝑒𝑟𝑟𝑒𝑛𝑐𝑒 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 138,266,000 − 0 84,984,000 − 0 82,020,000 − 0

𝑥100 𝑥 100 𝑥 100 𝑥 100
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐶𝑜𝑚𝑚𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 440,000,000 440,000,000 544,501,000

= 31.424 =19.315 = 15.063

7. Debt Ratio 300,55

280,251 = 0.197 301,742 = 0.206 1,485,498
𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 1,420,160 1,464,361

300,55
8. Debt-Equity Ratio
240,595 = 0.21 265,767 = 0.23 1,184,945
𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
1,139,909 1,162,619
𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦

9. Fixed Asset Turnover 65 406÷(581 177-10 736) 63 229÷(572 410.5-10 49 508÷(309 016.5-9 108)

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 𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠 65 406÷570 441 127) 49 508÷299 908.5
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡𝑠 − 𝐴𝑐𝑐𝑢𝑚𝑢𝑙𝑎𝑡𝑒𝑑 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛𝑠
= 0.11 times 63 229÷562 283.5 = 0.17 times

= 0.112 times

10. Operating Cash Flow/Sales Ratio

𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 − 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠 114175-3323= 110852 129567-294=129273 140182-5513=134669

11. Cash Flow Coverage Ratio 146,027,000 144,397,000 178,845,000

280,251,000 301,742,000 300,553,000
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐶𝑎𝑠ℎ 𝐹𝑙𝑜𝑤
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 = 0.521 =0.479 = 0.595

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