Strategic Management Issue in Shangri-La Hotel

Question

Task: Write an essay critically examining the strategic management issue arises due to Covid-19 affecting the Shangri-La Hotel Sydney. Discuss how the selected organization is dealing with the on-gain pandemic situation.

Answer

Executive Summary
The most panicking time when strategic management issue has appeared as Corona Virus has spread through the whole world. Lockdown situation is going on and as a result each and every industry is facing huge problems. Among all, tourism business is facing the maximum hit due to this crisis. Therefore, the hospitality business is going through huge loss as well as struggling with its strategic decision. To discuss the corporate and business level strategy in this COVID situation in regards to the strategic management issue, this essay describes the Blue Ocean Model, entrepreneurship, and other organisational structure to understand how Shangri-La Sydney is handling this crisis situation and what recommendations should be followed to overcome this problem.?

Introduction
Covid-19 is considered as a strategic management issue that has put its step strongly on all most every country and its proximity cannot be overlooked anymore. Governments and other authorities all over the globe considering radical steps to restrict the disease extent to the common people, hospitality experts have been ordered to investigate what is subsequent. The corona virus is hitting all levels of the hospitality business, but everyone has not the equivalent ability to overcome. Big resort or hotel chains will surely overcome the situation promptly, but other establishments may take a longer time to recover this pandemic. The side-effect of this business which is now revealing is unquestionably tough for the most accomplished hoteliers also. So, this time it is more essential to accumulate all the possible ways at the control and organise the business more progressively (Folinas & Metaxas, 2020).

This essay will discuss the how Covid-19 (as a strategic management issue) is affecting the Shangri-La Hotel Sydney and how the organisation is dealing with this ongoing pandemic situation with the help of their strategic management.

Findings
Corporate Strategy: To realise the extensiveness to which corona virus will impact on a single property or chain business as a strategic management issue, hoteliers need first to assess their situation and produce ideas at a corporate standard. Hoteliers with a preponderance of their trade arising from one voyage market require expanding their marketing ventures to draw fresh consumers. This is necessary when discussing the consequences of Covid-19 that Shangri-La grasps on a stable portfolio beyond the province to decrease the adverse results in one nation or another. To accomplish this aim, Shangri-La’s policy is discussed through Blue Ocean Strategy. This strategy is not that simple to obtain, but if it is accomplished, progress and differentiation will be assured. The Hotel requires changing its objective from profit and should focus more on sustainability and empirical approaches (Shangri-La International Hotel Management Ltd, 2020).

Strategic Management Issue

Reduce
This is the high time for reducing the cost of the organisation; as well Shangri-La is also trying to fit in this. The hotel is using an automatic cloud-based approach to handle its data and so there is no obligation for an IT specialist to manage or run it and the system is reducing the work time too as most of the people is working remotely. The costs are also reduced without the call for any substantial tools (Fernandes, 2020).

Create
To control the booking recalls and create large amounts of brand-new business in order to face strategic management issue, Shangri-La is trying to convince reluctant clients to keep their journey programs and support new customers to reserve the property. The organisation is practising different communication techniques, like messages/notes on the website, phone calls and emails to give the customers assurance on:

The hotel considers their health condition and uses additional actions at the premises
The hotel will return the booking amount if customers prefer to withdraw their tour

The crisis due to strategic management issue usually indicates there is a low need for lodgings. So without investing in any new policy promotion, Shangri-La Sydney is seeking to apprehend any need that already endures. In this case, the internal strategy plays a vital role. As an example, incentive structures of the organisation has a significant position in how much risk and return managers are trying to achieve. Consequently, the organisation is departing the obligations of risk control and return formation to proceed to the appropriate level (Martin & Remeikis, 2020).

Raise
Shangri-La is completely analysing its market mix and authorisation business. By managing an assessment of all services, its marketing position, and then the business demographics sources affected due to strategic management issue, the organisation then starts to measure the overall significance of the effect. Shangri-La handles several domestic tourists and agents within Australia and they will notice a lesser effect on their earnings in the short-term (Chen, 2020).

Eliminate
Shangri-La Hotel calls off all cancellation charges in spite of bookings done before March 1, 2020 for all those travellers who had scheduled to come from China, Japan, Italy, Korea, Iran and Saudi Arabia beforehand March 31, 2020. Moreover, the company has eliminated the loyalty program barrier and extended its Golden Circle loyalty program through Dec. 31, 2021; for this Diamond and Jade members will be benefitted a lot (Chen, 2020).

Entrepreneurship
During the global corona virus pandemic, Entrepreneurship in the hotel industry has to confront a new truth. They are realising that it is not only an enormous hygienic and health emergency afflicting millions of people around the world. It is also an unusual slowdown in the global market (Dolnicar & Zare, 2020). Therefore, the Shangri-La takes the chance to digitisation the work more and implements that system in its business designs to enhance the connections with its consumers. Moreover, the organisational entrepreneurship is ready to face its 50-80% loss in its revenue and economic health.

Organisation Structure and Controls
Resources
At this time, marketing is the only resource and has a significant function in the company. It must stand up and be counted for the customers. Shangri-La is also ensuring the fact that the marketing must not be influenced by the finance team; rather it is prone to customers' satisfaction and dependency. As the hotel is aware of its demographic position, the company is continuing a fast marketing drive to build distinct motives for tourists from alternative businesses (Chinazzi et. al., 2020).

Leadership
To sustain the organisational flow affected through strategic management issue, online meetings with the boards of the organisation are continuing with management teams who are continuously working through emergency systems (meetings are sometimes very long like probably four or five hours a day). Most of managers do not have proper experience to work on this platform; so they are not able to deal with it efficiently. Therefore, it is essential that the board of administrators invest some of their time with the managers, speaking about this new platform and training and supporting them to strengthen emergency scenarios and evaluate the approaches think ahead to keep the sustainability of the company (Chinazzi et. al., 2020).

Conclusion
As a conclusion basis the study of strategic management issue, it can be said that, in Australia local tour will act an immense part throughout the rehabilitation period. Moreover, reformation must maintain but the elemental policies should be changed, which can assist in refining the system. Large companies like Shangri-La Hotel must endure the attraction of forming the whole innovation funds but prefer to spend their resources more critically. Associates in that system must embed less focus on upfront technology, at least for 3 to 5 years (Smee, 2020). Moreover, according to technologies which have vital roles in their main business, hotel administrators should compute proper protection and faith over other features to continue the smooth journey.

Recommendations
This is the proper time to decide what way the company requires to practice in the coming years. Though it might be opposite of current situation, as a large hotel Shangri-La must stand beyond this negative by analysing where the organisation would be this time for next year.

Data analytics is serving a significant purpose in describing the losses to the current turnover flow, but it will also enable the business to create a further adaptable business plan for return in the deepest months. It will help to choose economic policies to come back from any strategic management issue, even in the long term. Several hoteliers will like to spend more on new customers, as there is a high chance of changing guest behaviour after this pandemic. So, Shangri-La should consider the geographical position of each customer when assessing or targeting new customers.
Proving flexible time to employees should be relevant according to the situation, but it is recommended that the company should not withdraw the recent recruitments. As expected, this year is not as strong as last year in Shangri-La Sydney, which suggests that seasonal recruitments would not be required and the hotel can completely believe on those staffs that they get proper training from the company. So those new recruitments will be happy having the job, even they have to spend some idle time at the current consequence.

Reference List
Chen, J. (2020). Coronavirus: Shangri-La extends tier status and benefits to Golden Circle members worldwide – Business Traveller. Strategic management issue Business Traveller. Retrieved 24 April 2020, from https://www.businesstraveller.com/business-travel/2020/02/26/coronavirus-shangri-la-extends-tier-status-and-benefits-to-golden-circle-members-worldwide/.

Chinazzi, M., Davis, J. T., Ajelli, M., Gioannini, C., Litvinova, M., Merler, S., ... & Viboud, C. (2020). The effect of travel restrictions on the spread of the 2019 novel coronavirus (COVID-19) outbreak. Science.

Dolnicar, S., & Zare, S. (2020). Coronavirus and Airbnb–disrupting the disruptor.

Fernandes, N. (2020). Economic effects of coronavirus outbreak (COVID-19) on the world economy. Available at SSRN 3557504.

Folinas, S., & Metaxas, T. (2020). Tourism: The Great Patient of Coronavirus COVID-2019.

Martin, S., & Remeikis, A. (2020). Tourism industry calls for coronavirus support in addition to bushfire package. the Guardian. Retrieved 24 April 2020, from https://www.theguardian.com/world/2020/mar/06/tourism-industry-calls-for-coronavirus-support-in-addition-to-bushfire-package.

Shangri-La International Hotel Management Ltd. (2020). COVID-19 Update. https://www.shangri-la.com/. Retrieved 24 April 2020, from https://www.shangri-la.com/dlp/covid-19-update/.

Smee, B. (2020). Australian hotels face ruin if coronavirus impact on tourism worsens, industry chiefs say. the Guardian. Retrieved 24 April 2020, from https://www.theguardian.com/australia-news/2020/mar/04/australian-hotels-face-ruin-if-coronavirus-impact-on-tourism-worsens-industry-chiefs-say.

Tourism and Transport Forum. (2020). Estimated Impact Of Coronavirus On The Australian Visitor Economy. Strategic management issue Sydney, NSW: Tourism And Transport Forum. Retrieved from https://www.ttf.org.au/wp-content/uploads/2020/03/Economic-Impact-of-Coronavirus-TTF.pdf

Appendices

Strategic Management Issue