Monitoring Improvement in Performance of Lubic Hotels - Assignment Example

Small Business Enterprise Contents Introduction 4 Discussion 5 1 Strength and weakness 5 2 Comparative measure of performance 6 2 Identifying Weaknesses 7 2.2 Analyzing the performance 7 2.3 Recommendation 8 3.1 Business Objectives and Plans 9 3.2 Revising of business plans 10 3.3 Action Plan 11 4.1 Impact of the proposed change 12 4.2 Managing the changes 13 4.3 Monitoring improvement in performance 14 Conclusion 14 References 16 Introduction The following report is prepared for the company Lubic hotels. The Lubic hotel is a small hotel that is based in Tokyo Japan. It is a cube hotel. The functionality of a cube hotel is that it provides basic accommodation facility to the people of Japan at a cost that is far less than the other hotels. These hotels which actually started their offering with providing a place for the workers who were too late to catch the last train to their home or did not want to go to their homes have expanded their business over the years. The capsule hotel industry as such provides basic amenities to the guests mainly in the form of a 7feet by 4 feet room and a TV to stay for the night comfortably at reduced costs. The company wants to expand abroad and build on the path of innovations. However among the major problems that the company is facing one of the problems is the problem of finance. The company is reeling under the problems of debt that is due to the fact that the no. of guests that the hotel entertains is very less. In case of a small enterprise the issue of performance is often overlooked. This is more so in a family owned business like that of Lubic. However, developing the necessary business skills is of paramount importance in managing the performance of a small and medium sized enterprise. This is because in case of the small and medium sized enterprise which are family owned the responsibility to handle the business is means of hereditary succession. However, if the successor is not worthy then the business performance is put to jeopardy. In order to improve performance it is sometimes required to introduce change. In order to restructure the business of the Lubic hotels for examples there are several changes that have to be introduced and if the business has to survive in the long run it has to embrace this changes. In order to see whether the proposed changes are working a review of the performance is taken after the changes have been implemented for a period of time. Discussion 1.1 Strength and weakness The small business enterprise that has been selected for discussion is a Japanese hotel named as Lubic small hotel. This hotel is formed to provide comfort accommodation to its customers at an affordable price. Since the concerned hotel is a small enterprise it is operated with the employee strength of only 8 members. Lubic small hotel had to face many obstacles and challenges in carrying out its business in Japan. The weakness that was encountered by the hotel is it faced the problem of inadequate supply of capital to renovate its hotel and expand its business operation. The concerned hotel also faced problem due to increase in debt. The services that were offered to its customers were limited and not comparable with the services or benefits that were offered by the hotels in rest part of the country. Lubic hotel business did not have any network for increasing its customer base. The concerned hotel is operated with the number of shares that is held by its family members. Due to the economic crisis the demand for the hotel was affected. The strength of the hotel is that it has focused on improving its services by targeting the overseas guests and women. The president of the company Keisuke Yui has managed to pay off the related debts of the company. He has developed a vision for the concerned hotel in converting the capsule hotel into a hotel that will offer high end service to its customers. The hotel has focused on expanding its business across the borders by establishing relationship with the partners located in other parts of the world. It offers facility to the passengers who have missed the train. 1.2 Comparative measure of performance The comparative measure of performance for Lubic hotel can be analyzed on the basis of its performance and areas of improvement that is required for its expansion and development. The concerned hotel has focused on innovation in its services. The business is operated with eight employees and in order to improve the performance of its business it has focused on extending its help and assistance to the financially troubled capsule hotels of Japan. The concerned hotel group is emphasizing on the human resources aspect of Japan. The main problem that is encountered is the barrier to entry for the new companies in the market. Therefore the comparative measure of performance model is adopted in order to grade and rank the performance of the business. These capsule hotels are famous in Japan and now they are becoming popular in china, Russia and in Europe. The hotel is charged according to the services that are offered to its customers. The concerned hotel charges 85Yen per night for extra facilities that is offered and 7 yen per night for the standard or normal services offered to its customers. The rooms of the hotel are suitable for accommodating a single person and it is equipped with various amenities such as quick access to wifi, TV and improved dressers and desks. The concerned hotel has focused on the comparative performance analysis in order to analyze their performance and compare it with its competitors. A standard has been established by the concerned hotel for identifying the areas where the facilities can be improved. The concerned hotel provides a wide range of facilities both in Japanese as well as in Western style. The demand of the concerned hotel can be measured from the fact that it provides benefit to the customers in carrying out their business stop over’s. 2.1 Identifying Weaknesses The weakness that is encountered by the concerned hotel can be overcome or mitigated by improving the financial condition and viability of the capsule hotels. The concerned hotel has paid all its due debts to its debtors and it has also made arrangements in collecting more capital for its business operations. A Lubic small hotel has converted its simple services into high end services. The concerned company has focused on entering into new ventures. Since small business lacks capital in order to expand its business operations therefore the enterprise is required to develop contacts with its partners and widen its business across the cross borders. The concerned enterprise has encountered problem in its expansion since most of the shares of the company are held by the members of the family therefore it is required to strengthen its human resource base. In order to operate in the international market the president of the concerned hotel has emphasized on forming a new company with the partners holding stake in the business. The most common problem that is associated with the hotel is the unforeseen expenses. The unforeseen expenses are required to be mitigated. Since the company is on the verge of improvement in its services and expansion of its business therefore it is required to estimate the total revenue that is generated by the enterprise in order to allocate the expenses on the basis of the revenue earned (The Economist, 2010). 2.2 Analyzing the performance The adoption of strategic management tool in the small business enterprise can facilitate in overcoming the challenges that is encountered by the business and generate adequate profitability from its business operations. The difficulty in raising capital by the concerned enterprise can be mitigated by developing adequate source for accessing of the capital that is required for the growth and expansion of its business operations. The country is required to create a wide number of attractions for its tourists. Therefore the number of inbound tourist is likely to increase in number thereby increasing the demand for the capsule hotels. Sometimes the business is considered completely a new business operation. Since the small business enterprise is engaged in providing employment to large number of employees. The concerned hotel is engaged in providing employment to eight employees therefore the concerned hotel is required to expand its operation in order to generate more profit and provide employment to large number of employees. The growth strategy is required to be adopted by the concerned hotel in order to expand its business operations. The growth strategy is based on three perspectives that is the personal vision and ambition of the entrepreneurs, the entrepreneur is required to adjust itself in the environment as well as in the market, the enterprise is required to adopt innovation and changes according to the environment. In the concerned hotel the president of the company has focused on the vision and mission of the company by improving the services that is offered to its customers. The president has also decided to expand its business operations (Tabuchi, 2010). 2.3 Recommendation In order to expand its business operation across the border the concerned hotel can adopt and implement the alternative theories model. This theory deals with the comprehensive analysis of different approaches required for growth and development in small business enterprises. This theory also focuses on various developmental stages of the enterprises starting from the inception to the maturity stage. The growth and development of the concerned hotel is encountered with various problems and challenges in taking strategic decision by the power or the manager of the enterprise. Lubic hotel in order to expand its business operation has adopted the alternative theories model for developing it’s strategically as well as tactical skills. The president of the hotel has adopted the entrepreneurial strategy through which the small business enterprises faces the uncertainties associated with expanding its business and improving its services. The president of the concerned hotel is required to focus on the long term perspective in order to expand its business operation. Since the concerned hotel is a family business where the shares of the enterprise are owned by the members of the enterprise therefore the concerned hotel is required to develop strong partnership with the partners of other countries in order to expand its business operations (Schmit, 2009). The number of employees is very less and therefore it is required to increase its employee’s base. Since the concerned hotel faces problem related to accumulation of capital therefore it is required to make arrangements for venture capital for carrying out its business operations. The concerned hotel is required to establish its relation with the travel agencies. Since they can refer this service to the travellers or the passengers who has missed the train or require lodging facilities for few hours. 3.1 Business Objectives and Plans The main business objectives of the concerned enterprise are to create the Lubic hotel as a sustainable enterprise and adopt various new technology and services in fulfilling the needs and requirements of its potential customers. The concerned hotel has also focused on business expansion plan to expand its business across Japan (Raessa, 2014). Since the expansion of business operation is a critical and vital process therefore an integrated program is required to be imparted to its employees for achieving its growth objectives. The small enterprises with growth and development objectives are considered as the Growth oriented enterprises The entrepreneur of the small business enterprise is considered as the sole and the main decision maker of the enterprise. Therefore the president of the concerned hotel is required to take decision in order to convert its entrepreneurial vision and objectives into action. The concerned hotel is required to target on new markets by adding new services in its business line. The convenience offered to the passengers has increased its demand therefore the concerned hotel is required to provide unique facilities and services on the basis of the country in which it is offering the services (Keller, 2006). The business plan is designed in such a way that it will cater the needs and requirements of all the passengers. The concerned hotel has focused on improving its services and offering adequate facilities according to their requirements. The long term goal of the hotel is to create a chain of hotel operating across the world and creating a brand image and identity in the market. 3.2 Revising of business plans The business plan adopted by the business is required to incorporate changes that is changing or restructuring the price structure of the hotel according to the service that is offered to its customers. The concerned hotel charges minimal price from its customers. Therefore the price is required to be restructured. Since the hotel is improving its services and offering unique service to its customers so the price per night is to be charged accordingly. The needs and requirements of the customer varies according to the regions in which they abide, but the facilities offered by the concerned hotel is arranged and designed on the basis of the lifestyle and needs and requirements of the customers in Japan (Joshi, 2005). The concerned hotel has scheduled the time according to the activities that is required to be performed such as one hour for shower, 7 hours for sleep and one hour for rest. It provides functionality of 9 hours which is specially designed for the busy city called Japan. Since the concerned enterprise is focusing on expansion of its business across the borders therefore the hotel should make provisions for alterations in its schedule for offering services to its customers. The concerned hotel must focus on promoting its business in order to build reputation for the services offered by the concerned hotel in the market. 3.3 Action Plan The plan of action that the concerned hotel is required to adopt in order to continue its business operation in Japan as well as expand its business operation across the cross borders has been planned on monthly basis  Plan of Action Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Determining the objectives                       Establishing the mission and vision of the hotel                       Identifying the weakness of the business                       Improving the services                       Adding new services to the existing services                       Planning the schedule                       Expanding its business operation                       Developing networks                       Providing unique services to its customers                       Restructuring the price                       Focusing on delivery of location specific services                       Promotional activities for developing brand image                       4.1 Impact of the proposed change In order to return the business to profitability there are several steps that the company must take. The steps may involve indulging in better service providing to the guests of the company. The company may also involve in talks with the bank and the management of the bank to cut the loan amount in exchange of a better performance by the company in the coming months (Hellriegel and Slocum, 2008). In order to provide better performance or service to the customers the hotel must impart training to the employees of the company. There are other changes that will fall upon the business of hotels. These changes are relating to the fact that the business will have to expand globally in order stay relevant and diversify in other sectors so as to reduce the risks related to business. In opening the business at different locations the business has to secure partnerships of the foreign companies many a times. Since it is a small business therefore it will not be in a position to acquire other businesses so the best way for expansion will be to go for strategic business partnerships. In order to help the company turnaround the company may also start its offering in other sectors such as consulting to help other capsule hotel industry to turn around. It can attract customers in the consultancy business by charging the other hotels money only when this company has made them earn a certain amount of profit. The company has also to embrace change in the ownership structure from a family owned business to a private limited company. 4.2 Managing the changes There are some employees who are associated with the company for a very long period of time and will be unwilling to take new training. The company must motivate these employees by means of telling the employees of the benefits that the employees will get by giving better service to the customers of the company (Hill and Jones, 2012). Certain objections are bound to arise when the company aims at changing the ownership structure of the company. As the company changes or aims to change the organization structure of the company, there are several changes that will set in. The3se changes will related to fact that a new corporate culture will be incorporated in the company and in many cases the management of the company will be called into question and will have to explain their decisions to the share holders of the company. The working environment inside the company is also likely to change and more accountability might be demanded of the staffs. These factors may cause the staffs to resent changes at an initial stage as the staffs may not wish to go by the changes. The staffs may not wish go by the changes and generally have a fear of the changes in the organization. It is due to the management to help them overcome the fears by focusing on the positive effects that these changes will bring in (Hussain, 2000). When the company will introduce consultancy services there are new employees who will join the company’s workforce. It is also a new line of business that the hotel is going to enter. This will result in the fact that the hotel has to provide the employees of the company special training and induction training for the new staffs who will be joining the hotel. There will be some staffs who will resent to training but focusing on the benefits will help motivate them. 4.3 Monitoring improvement in performance It is not enough to just implementing the changes but it is also important to monitor the performance after the changes have been implemented to see if the changes have brought in something good for the hotel. In order to measure if something good has occurred for the hotel due to the changes that have been brought in a best measure is to measure the performance of the hotel in financial terms (McLean, 2005). Since the hotel is now buried under the burdens of debt so one of the best measure to measure the performance of the hotel will be in terms of whether the hotel is able to see the face of profit. Another measurement of the performance will be to conduct a survey of the customers of the hotel in terms of the satisfaction level in relation to the service that they receive. The survey or rather questionnaires may also involve the employees of the hotel in terms of the training that they have received and how has the training helped to boost the performance of these employees. The survey of the customers in terms of service that they have received and the employees in terms of the training they receive will provide valuable insight into the performance along with the financial tools. Conclusion The concerned hotel is in Japan and it has been observed that Japan has encountered various problems due to global recession prevailing in the economy. Therefore various industries has faced problem in operating their business operation in Japan. The concerned hotel is engaged in offering unique and special services to its business clients. The concept of the hotel is based on capsule concept which has been emerged for providing benefit and convenience to its busy clients and businessmen. Since the busy professional work too hard and rest too less. Therefore this concept has been developed for facilitating the customers to do both the task together at the same time. The capsule hotel is mainly formed for satisfying the needs and requirements of the businessmen. It has been based on the concept of 9 hours in which it has divided its time such as 1 hour for shower, 7 hours for sleep and 1 hour for taking rest. The hotel focuses on style, functionality and simplicity. The demand for these capsule concept in Japan has motivated the president of the company to expand its business operation across the cross borders in order to serve the customers globally. These new concept hotels are revolutionary in the present hectic life styles. The concerned hotel is required to focus on promotional activities in order to create awareness of its brands in the minds of the customers across the world. The concerned hotel is required to focus on improving its services. With the increase in demand and popularity the hotel is required to modify its structure. The Lubic hotel as it is seen has to undergo certain changes in the structure of the business and other issues which will help the hotel boost the performance levels and help it to turn around the losses that it is making into a profitable proposition for the business. However, for that to happen the company has to motivate the employees of the hotel so that they can embrace the changes that are needed to be incorporated. This requires a good training and motivation of the employees so that they are ready to embrace the change. This also requires a change in mentality of the management in charge of running the business. References Hellriegel, D. and Slocum, J., 2008. Organizational behaviour. OH: Cengage Learning. Hill, C. and Jones, G., 2012. Strategic Management: An Integrated Approach. OH: Cengage Learning. Hussain, A., 2000. Managing Operational Risk in Financial Markets. MA: Butterworth-Heinemann. Joshi, R. M., 2005. International marketing. New York: Oxford University Press. Keller, K. L., 2006. Marketing management. UK: Pearson Prentice Hall. McLean, G., 2005. Organization Development: Principles, Processes, Performance. California: Berrett-Koehler Publishers. Raessa, 2014. 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