Introduction Guyana in itself is fast becoming a vacation destination for those who wish to experience nature in its purest form
Introduction
Guyana in itself is fast becoming a vacation destination for those who wish to experience nature in its purest form. Guyana is positioned as an emerging ‘green state’ on the world stage, thereby creating awareness of the natural wonders, which the country has to offer.
Marketing the country, as a tourist destination has been an ardent process by the Government of Guyana via the Ministry of Public Telecommunications as well as The Tourism and Hospitality Association of Guyana- a process, which is increasingly becoming a success story. How then do we prepare for an increase in visitors to our country and those of us who wish to explore this beautiful, bountiful country we call home, as well as persons who may wish to travel nationwide- be it for work or pleasure?
The answer to that question lies in being prepared which creates a need for businesses to provide services within the hospitality industry. In establishing a justifiable need for our business, we have examined what is offered in the industry to expectant visitors and nationals. Being the premier point of contact and the gateway for persons to view what is available we examined both the Ministry of Public Telecommunications and The Tourism and Hospitality Association of Guyana- specifically the ability of a person to simply view what the country has to offer in terms of accommodations in detail.
The outcome of this exercise provided insight into what is currently being offered and the target market. This process helped to highlight the fact that there is need for a bed and breakfast service to be offered as an alternative for persons who wish to travel but not at an astronomical cost; while experiencing comfort and safety.
It was also noted that for many Guyanese whose job entails constant travel to various hinterland regions, it is often difficult to locate a comfortable bed and a decent breakfast. An individual travelling from Georgetown (region 4) to Mabaruma (region 1) has to be accommodated most times at a Guest house or Hotel (if available). This has constantly proven to be a difficult task since finding accommodations upon landing or even booking accommodations in particularly regions 1,7,8 and 9 is difficult and the accommodations suggested or identified usually leaves much to be desired or the cost is exorbitant; however, individuals have no choice but to accept what is being offered.
Therefore, with this idea in mind, we decided to develop an e-business plan for Bed and Breakfast (possibly lunch and dinner) within the hinterland regions of Guyana. This e-business concept will describe the opportunity and offerings based on available knowledge of the market of interest.
Company Overview
TWM Bed & Breakfast operates as a hotel. The Company offers accommodation, food, and other recreational facilities.
Sector: Hospitality
Industry: Food, Lodging & Restaurants
Corporate Information
Address:
1 Water & Cornhill Street
Stabroek, Georgetown
Guyana
Phone: 592 – 600 – 0000
Web url: www.twmbnb.com
Mission:
To provide quality temporary accommodations and breakfast services at competitive rates and expanding our exposure via the internet.
A. Identify the performance objectives your organization would want to excel in and why.
TMW Bed and Breakfast is aims to satisfy its customers’ requirements for fast and dependable services at reasonable price, as well as helping its own suppliers to improve services they offer.
There are five basic performance objectives and they apply to all types of operation:
• Quality
• Speed
• Dependability
• Flexibility
• Cost (Slack, N. et al, 2001)
The operations performance objectives are discussed below in order of priority
1) Doing things right by providing error free goods and services, which will satisfy the customers, is known as ‘quality’. TMW aims to achieve this objective through an integrated, user-friendly website that connects customers and service providers via a live video chat. Customers will be able to ask specific questions pertaining to their preferences and have a first-hand look at their accommodations, thus, improving the experience and managing expectations.
2) Another performance objective is speed, which means by doing things fast, to minimize the time between the order and the availability of the product or service that gives the customer a speed advantage. Customer booking history will be stored on TMW’s database along with the rating of the accommodation and information provided through the review tab. This will allow for suggestions based on preference and dislikes, in addition to facilitating one-click, thereby significantly reducing the transaction processing and improving the customer’s experience.
3) Third performance objective is dependability that means doing things in time for customers to receive their goods or services when they are promised. TMW enters into a contract with all service providers to provide a full refund to all customers whose accommodation and service falls short of the experience promised; situations that may be eligible for a refund under this policy generally fall into one of three categories:
• The host fails to provide reasonable access to the booked listing.
• The listing booked is misrepresented (ex: number of bedrooms, location, lacks promised amenities).
• The listing is not generally clean, is unsafe, or there is an animal in the listing that was not disclosed prior to booking.
However, to submit a valid claim for refunds, customers are required to:
• Contact TMW within 24 hours of check-in to document the issue and place a hold on the host’s payment. Include photographs or other evidence of the issue as part of your claim.
• Be responsive to TMW requests for additional information and cooperation.
• Not have directly or indirectly caused the Travel Issue.
• Have used reasonable efforts to remedy the circumstances of the Travel Issue with the host prior to making a claim, including messaging the host on Airbnb to notify them of the issue. This will be verified in the customer’s account.
In addition, all Hosts are required to complete TMW’s verification process; this helps us keep TMW secure, fight fraud and mitigate customer risk.
4) A clear result of responding to a dynamic environment is that organisation change their products and services and changes the way they do business. This performance objective is known as ‘flexibility’. (Peters, T., 1998) argues that we must learn to love change and develop flexible and responsive organizations to cope with the dynamic business environment. TMW customers are able to choose from with accommodations ranging from 1 – 4 rooms, detachment houses or in-resident rooms, high quality self-contained rooms or very modest minimalistic rooms, internet, town, country and hinterland; and select menu options specific to the clients’ dietary constraints; these options will also be available via TMW’s mobile application available for download in the play store.
5) One major operations objective, especially where companies compete with prices is ‘cost’. Low price is a universal attractive objective to customers, which can be achieved by producing goods at lower costs. TMW will keep cost at a minimum, since many of the cost associated with the traditional brick and mortar operation (rent and on-location staff) are reduced and in some cases eliminated altogether; interactions with customers and service providers minimizes the need for customer service representatives and marketing agents since the customer and service providers have direct contact through our video chat portal, office space and telephone charges will be kept to minimum as a result of not having to house customer service staff and facilitating direct contact between customers and service providers.
B. Develop a strategy for your operations to help the organization achieve its objectives.
Keys to Success:
• User-friendly website
• Superior customer interaction and feedback
• Effective marketing of services offered
• Creation of an image, which speaks to customer satisfaction via feedback from other customers and business ethics
• Competitive pricing to maintain market share
Target Market
The target market is wide Government Ministries/Agencies, business and leisure travelers, sophisticated and conservative customers, domestic, regional and International tourists and occasional accommodation users.
In the hinterland locations, the business intends to target Government Ministries/Agencies and Eco-tourists. This segment was assessed as lucrative market segments in terms of profitability, growth, growth potential and size.
Service Provided:
• A database of Bed and Breakfast providers nationwide
• Meals as per request (Breakfast, Lunch, Dinner and special dietary needs)
• Guidance for customers on booking based on their needs
• To ensure effective and efficient service delivery the business will be equipped with the necessary technology to achieve and maintain a balanced integrated system of service delivery through the use of Sabre Solutions which is the technology leader within the hospitality industry.
Competitive Edge:
The competitive advantage of this business is offering affordable safe, hygienic and comfortable accommodations. Accommodations offered are often times costly and not comparable with cost incurred especially in the hinterland regions. The business will ensure feedback from customers and ensure that service providers have the capacity and resources for superior service delivery.
1. The website will be interactive and provide for real-time communications with customers.
2. The business will seek to maintain a list of strategically placed available locations (all 10 administrative regions)
3. Fast and Secure payment options
4. Customer service training for service providers within the scheme
5. Packages to accommodate almost any budget
The business will thrive on service leadership not only by understanding who the customers are but by providing value-added for their dollars spent. Emphasis on relationship building and the creation of an online community will expand the brand and create goodwill for the business.
The leadership, infrastructure and organizational learning will also be a keen aspect of this business. Remaining competitive will require management remaining open minded to new business technologies to reflect the constantly changing nature of the world of technology. The business will be positioned to react, understand and learn from new business opportunities.
RISK AND MITIGATION STRATEGIES
Market Risks
• Demand • The size of the market for the product and services offered by the Bed & Breakfast should be established in the form of a comprehensive Marketing Plan and Strategy before initial investments are made.
• Falling prices • Low pricing strategies will not be used as a competitive tool, instead other strategies such as product differentiation, customer intimacy, operation efficiency and excellent customer service will be employed as competitive strategies.
• Seasonality of demand • The Bed & Breakfast will take the seasonality of demand for Tourism and Hospitality products and services into account and embark on promotions in order to stimulate demand during seasons when demand is low.
• Foreign exchange risk • The Bed & Breakfast will quote all prices in Guyanese dollars thereby reducing the risk associated with fluctuating foreign currencies.
• Increase in cost of inputs • The entity will procure its supplies from a number of alternative suppliers to avoid competitive pressure from other providers and sourcing the best prices on behalf of our service providers.
Operating Risks
• Operating cost overrun • Contingency funds will be set up to minimize operating costs overrun as well as Monitoring and Evaluation of operating costs of the Bed and Breakfast service providers on a monthly basis.
• Failure to meet operating performance criteria • A balance score card for the Bed and Breakfasts will be set up for all management functions of the business.
• Technology risk • The entity will seek expert advice when it comes to Procurement of technology needed for the front and back office operations.
Financial Risks
• Inflation • The inflation rate will be factored in the financial Projections of the Bed and Breakfast to ensure that the inflation risk in minimized.
• Interest rate • A combination of Government funds (set aside for the development of small and medium sized entities), personal savings as well as private sector funds will be utilized in order to minimize interest rate associated risks in the Bed and Breakfast.
• Cash flow issues • Cash flows issues could result if the occupancy rate is not improved to more sustainable level. While all measures will be taken to manage cash with the most care possible and to ensure continuous liquidity, the income generating capacity of the Bed & Breakfast will be the most determining factor for sustainable cash flows. Where serious cash flow problems are incurred, the business will rely on a Credit Union that will be funded by monthly contributions made by members.
BALANCED SCORECARD
The Balanced Scorecard will be used as a performance metric for strategic management within this e-business. This will help to identify and improve various internal functions and their resulting external outcomes as a means to measure and provide feedback. A strategy map has been drafted for this area of operation.
Goals Measures Target Goals Measures Target
Financial Perspective
Customer Perspective
Decrease Partners operating cost Average reduction in monthly operation cost Add high-value customers # of new customers bookings
Increase sales # bookings Retain high-value customers % of existing customer making complaints
Increase revenue growth in 6 months Monthly revenue collection Add high-value partners # of new qualified service providers
Debt Servicing Average # of days debts are past due Retain high-value partners % of existing partners making complaints
Internal Processes Perspective Learning and Growth Perspective
Customer Support Service Time taken to respond to e-mails or direct messages. Strategy Awareness # of hours spent in strategy awareness sessions
Transfer of funds Time taken to pay service providers
Time taken to refund customers
Planning and controlling capacity and inventory
Capacity planning and control is the task of setting the effective capacity of the operation so that it can respond to the demands placed upon it. Within the bed and breakfast industry, effective capacity would react to fluctuations in demand. Using chase demand strategy in this industry, would require a level of physical capacity, all of which would only be used occasionally, as different numbers of staff, different working hours and even different amounts of communication traffic (technology) may be necessary in each period.
To provide customers satisfaction through this planned period, we decided to use chase demand to plan and control capacity which will avoid wasteful provision of excess staff and accommodation facilities. Different level of staffing, such as part-time, temporary or contract workers, will be required throughout the year as demand for accommodation fluctuates, while still ensuring that quality standards and safety procedures are adhered to and customer service levels are maintained.
The chase demand approach requires that capacity is adjusted in some way. This adjustment can be done by varying the number of productive hours worked by staff in cleaning, preparation of meals and communicating with clients. With increase in demand for service, overtime is worked, when demand decreases, the number of productive hours will be reduced. This will be feasible for our operation. Maintenance work and transportation of goods to the hinterland regions can be done during the period of reduced demand for accommodation.
In our bed and breakfast operation, it is important to use a combination of techniques to plan and manage capacity so as to generate revenue to its full potential and be competitive in the market. Another approach used would be yield management. Yield management is extremely useful when the market is clearly segmented, the service cannot be stored but utilized, services are sold in advance (clients pay prior to travelling to the interior) and marginal cost is relatively low.
When demand is unlikely to fill capacity, price discount is given to customers. For example, government workers close off travelling to the interior at the end of November each year and resume such travel duties in February of the following year; therefore, a price discount can be given between December and January. Thereby attracting some amount of customer traffic and also providing additional entertainment during this period.
Conclusion
Overall, TMW’s operating strategy is a long-term goal. As was explained above, it is important that TMW have an operational strategy because it explains the types of services that the company will offer its market target, and how TMW is going to get advantages over its competitors. TWM made good planning and control in its capacity, supply chain and quality. Further, in order to make improvements in its operations, TMW intends to measure quality, speed, dependability, flexibility and cost. However, even though internet based companies have obvious advantages over traditional (brick and mortar) companies, TMW still anticipates some challenges in its operations.
Advantages and Anticipated Challenges
Advantages
• Keeping abreast of the behavior of potential consumers and competitors is one of the fundamental considerations when starting a business. Having a successful e-business website can be a major boom for most business; it reduces the costs inherent in running a “brick-and-mortar” operation.
• TMW is a web based operation, hence, it will be conveniently open 24 hours a day, 7 days a week, and 365 days a year, enabling business transactions to occur no matter what time of day. An e-business website has the advantage of proximity, whereby customers can immediately access the virtual Office from any part of the world.
Anticipated Challenges
• Changes in attitudes of consumers result in behavioral challenges to businesses. These challenges include lack of trust of customers and their fear of intrusion of privacy which makes them reluctant to involve in e-transactions.
• In addition, the rampant frauds taking place over the Internet and lack of awareness of customers about the availability of services poses a challenge to businesses. Miscellaneous challenges such as channel conflict, the problem of attracting and retaining a critical mass of customers and the need to improve the order fulfillment process, are the other aspects that are a cause of worry.
• When a startup company is internet based technical disruptions can cause the business to fail, particularly those organizations unprepared or unwilling to change and should expect to be challenged by other startups with even newer technologies.
