7. Discussed the existed business, corporate and functional strategy.
• Banyan Tree Holdings Limited is a leading manager and developer of premi um resorts, hotels and spas in the Asia Pacific. After a successful IPO in Jun e 2006, Banyan Tree Holdings Limited planned to use parts of the IPO proc eeds to finance an ambitious expansion plan. At the core of this business d evelopment plan was an ambitious proposal to open 21 new resorts over f our years which would span non-Asian territories from Greece to Mexico. • Banyan Tree has several business segments: hotel investment, hotel mana gement, spa operations, gallery operations, property sales, design fees and others. The Group has two award-winning brands: Banyan Tree and Angsa na, and their primary business is the management, development and own ership of resorts and hotels.
• The brand image of Banyan Tree’s is neither luxury nor exclusive, but a spirational. The strong brand recognition allows it to be a price-maker rather than price-taker at the high end market of resorts, and it is also the platform for the Group’s global expansion. So this case considers h ow a company with an experiential brand should manage its growth w hile at the same time prevents losing the core values of its brand.
8. Proposed the existed business, corporate and functional strategy.
• Four components of a business strategy:
• Goals: one of the top two or three dominant players in a global space which is ve ry niche but nevertheless very global.
• Scope: Banyan Tree provides a luxury retreat for guests. The Banyan Tree target market is narrow and affluent.
• Competitive advantage: before the 7 year mark, location is a competitive advant age. Banyan Tree goes into locations that are not heavily developed and create s ustainable resorts.
• Logic: Banyan Tree intends to expand and locate in diverse locations. • Corporate strategies:
9. Financial analysis in the case.
• Banyan Tree Holding Limited announced second-quarter results for th e period ended June 30,2006. Revenue had more than doubled to $ 7 1.4 million, largely due to post-tsunami recovery.
• Profits have risen significantly since the 2004 tsunami
• Portion of IPO proceeds set aside for ambitious expansion plan
• High price to cost ratio 5to 7years
• Strong links to financiers.