The development of concern in Saudi Arabia opens big positions for companies runing in hotel and leisure industry because Saudi Arabia is the state with clime and geographical conditions favourable for the development of touristry and, hence, the demand on hotels is high. In this regard, get downing up a little concern in Saudi Arabia can be really profitable, taking into consideration the quickly turning development of tourer industry in this state. At the same clip, it is of import to take into consideration significant troubles that may originate in the class of the development of concern in Saudi Arabia, associated with specificities of the local civilization, political system and economic development. in such a state of affairs, the company come ining Saudi Arabian market should come prepared to get by with challenges, such as the intervention of province into concern, some elements of protectionist policies being implemented in Saudi Arabia, the deficiency of democratic rights and autonomies, every bit good as democratic traditions at big, and others. However, on get the better ofing bing troubles a little hotel built in Saudi Arabia and promoted internationally can go a desirable finish for rich clients, stand foring the upper section of the hotel and leisure market. In such a manner, the development of the little hotel concern in Saudi Arabia can convey considerable net incomes on the status of get the better ofing bing hazards and menaces and effectual concern direction. In fact, it will be a family-type hotel, with 5-6 employees supplying basic hotel services and keeping the hotel installations.
Comparison the theory and concern
Theoretically, the development of concern should be grounded on the equal correlativity between possible hazards and possible return on investings. In this regard, the development of the little hotel concern in Saudi Arabia represents a potentially profitable concern, although hazards associated with this concern are comparatively high. This is why the determination to put into the development of the little hotel concern in Saudi Arabia is rather hazardous. At any rate, the hazard of failure of such concern is systematically higher compared to the hazard of the development of the same concern in a well-developed, democratic state with open-market economic system, such as the UK. On the other manus, the development of the little hotel concern in Saudi Arabia can convey higher net incomes compared to the same concern in the UK. In this regard, it is necessary to take into consideration the natural environment and factors lending to the outgrowth of the tourer industry in Saudi Arabia. Therefore, mentioning to the theoretical premise that the investings are worthy to do if there is a balance between hazards and possible return on investings, Saudi Arabia is an pulling state to put into the development of the little hotel concern in this state.
Why the concern start, motor, push of pull
Today, get downing up the little hotel concern in Saudi Arabia is really perspective due to the fast development of the tourer industry in Saudi Arabia and the attraction of this state for tourers and concerns. At the same clip, the state has a important internal potency to turn economically and the development of the local substructure facilitates systematically the development of the little hotel concern. In such a manner, conditions are favourable for the development of the little hotel concern in Saudi Arabia. At the same clip, the investing in developed states, such as the UK, is rather unsure today because of the negative effects of the economic recession on the economic system of developed states. In add-on, possible returns on investings are higher compared to return on investings made in developed states. In this respect, the little hotel concern can develop fast and get down conveying net incomes faster than the little hotel in London, for case ( Peters, 2002 ) . In add-on, the degree of competition in Saudi Arabia is lower compared to well-developed states.
In such a state of affairs, it is of import to brood upon the selling analysis of the development of the little hotel concern in Saudi Arabia. First of wholly, the merchandise introduced in the market is the little hotel, Alsaad Hotel, which is equipped with modern technological devices and all indispensable equipment, including wi-fi cyberspace, air-conditioning, recreational installations, and other comfortss. The hotel will hold approximately 10 suits with classical furniture. The hotel will aim at the upper-class audience to keep the premium section of the market. The hotel will supply services for clients, who attend Saudi Arabia as tourers.
The monetary value of the suits in the hotel and hotel services will run into the mean monetary value of hotels in the premium section of the hotel market. At the same clip, it is of import to run into the quality of services to the monetary value established by the hotel. Otherwise, the hotel faces a hazard of losing its clients. In contrast, the high quality of services will warrant the high monetary value of the hotel suits and services ( Gitlow, 1999 ) . In this respect, the hotel should concentrate on the entire quality direction which is highly of import in the modern-day concern environment, particularly in the competitory battle between companies runing in the premium section of the market.
The topographic point, where the hotel should be build, should be near to the seashore and have entree to the mainstream substructure of the state that means that the hotel should be near to the capital of Saudi Arabia or other big metropoliss of the state, which have a well-developed substructure and where the figure of tourers is high ( Benfari, 1999 ) . In this respect, Jeddah is the most attracting metropolis because it is located on the seashore of the Red Sea and, what is even more of import, this metropolis is close to Mecca, the sacred metropolis for Muslims from all over the universe. Such location of the hotel will assist the hotel to accept tourers from different states, promote its services and derive the positive repute.
In this respect, the publicity of the hotel is really of import. Taking into consideration the fact that the hotel aims at tourers, the promotional run should widen to the international degree to make the mark client group. In this regard, it is possible to utilize all media but cyberspace seems to be the most effectual because it allows to supply elaborate information about the hotel and its services to all possible clients from all over the universe with minimum costs ( Mohrman, 1998 ) . What is meant here is the fact that such publicity run will be cost-effective because the costs of publicity via cyberspace are comparatively low, whereas the development of a large-scale promotional run on telecasting or print media will necessitate significant fiscal resources. However, the effectivity of publicity in print media or on telecasting is dubious. The effectivity of cyberspace is beyond a uncertainty because tourers usually search for a desirable finish and hotels available in the desirable location via cyberspace. Therefore, the hotel should supply its possible clients with the possibility to see the site of the hotel, where they can obtain all the information they need about the hotel and its services. In add-on, it is necessary to supply the client support service to guarantee that clients are able to reach the hotel directors any clip and acquire information on any issue they are interested in.
At this point, it is deserving adverting the fact that the development of the little hotel concern in Saudi Arabia can be successful due to the overall stimulation of the development of little concern in this state. In fact, Saudi Arabia has favourable conditions for the development of little concern. This state is ranked 5th among states, where it is easy to get down up concern. On the other manus, the state of affairs in Saudi Arabia is non ever possible to calculate in the long-term position because of the deficiency of democratic traditions and establishments and the power of the governing King of Saudi Arabia.
The development of the little hotel concern will necessitate the building of the hotel, development of its installations, installing of indispensable equipment, and close cooperation with tourer bureaus and companies working with tourers, such as transit companies, for case. At the same clip, the web of the hotel will be limited to the hotel proper and its links to other companies or concern spouses. In this regard, the company should develop close relationships with local providers to supply clients of the hotel with fresh nutrient, for case, every bit good as local ushers, who could assist them to go throughout the part.
On analysing branding chances, the little hotel concern in Saudi Arabia has two options. On the one manus, the hotel can utilize franchising and go a portion of a celebrated trade name. However, this will strip the hotel of independency but it will allow with the celebrated trade name image. On the other manus, it is possible to make the original trade name and this is the best solution because in such a manner the hotel will pull clients tired of the western life style and seeking for original, Saudi Arabian civilization, which manifestation they can happen in the trade name new hotel.
The first investing into the development of the little hotel concern will cover the edifice of the hotel, development of its substructure and installations, equipment, and publicity. The return on investings will do the hotel profitable in 3-4 old ages on the status of the stable and effectual operation of the hotel.
Economic: SWOT, 5 forces, value concatenation
Low costs of the little hotel development
Family-type of concern
Lack of experience
Cultural barriers of directors and local employees
Taking a larger portion of the local market
Development of international concern
Construction of the web of little hotels in the Arabian states
Lack of open-market rules
Intervention of province in economic system
Political analysis. The political state of affairs is characterized by stableness due to the regulation of the King, who is the swayer of Saudi Arabia. However, the state lacks democratic traditions and criterions. Hence, the hazard of intervention of province into the economic system of Saudi Arabia persists.
Economic analysis. The economic state of affairs in Saudi Arabia is favourable for the development of concern because the authorities stimulates the development of concern and attracts foreign direct investings to the national economic system. On the other manus, the state seemingly lacks the open-market economic system traditions and rules that may raise obstructions on the manner of the development of concern in this state in instance of the alteration of the political state of affairs.
Social analysis. The societal state of affairs in the state is stable and the little hotel can number for the employment of qualified forces. On the other manus, cultural differences may raise barriers between directors and employees, which can be eliminated through the survey of the local civilization and its distinctive features.
Technological analysis. The little hotel should utilize all the technological progresss applied to the hotel industry. In this regard, it is of import to put accent on the fact that the little hotel will come in the premium section of the market that implies the high quality of services which is impossible to utilize of advanced engineerings. On the other manus, the usage of advanced engineerings increases the costs of the concern development but attracts clients, particularly from western states.
Therefore, taking into history all above mentioned, it is of import to put accent on the fact that the development of the little hotel concern opens big positions for the development of the tourists-oriented concern in Saudi Arabia. The socioeconomic and political state of affairs in the state is non ideal but still Saudi Arabia has good conditions for get downing up concern in this state. In such a manner, investings in get downing up the little hotel concern in Saudi Arabia are a sensible determination but such a determination should be grounded on the elaborate analysis of the selling state of affairs and chances of the concern in this state. In this regard, the current survey has shown that Saudi Arabia attempts to pull investors but the state still lacks democratic rules and criterions being introduced en masse every bit good as the state does non implement rules of the open-market economic system to the full extent. Alternatively, economic system is regulated by the province and the alteration of the political state of affairs may take to the alteration of economic policies conducted by the local sovereign. Naturally, in such a state of affairs, it is rather hard to calculate the development of concern in Saudi Arabia in a long-term position. Nevertheless, the current survey has revealed the fact that, on the land of bing theories, such as cost-efficiency theory, it is possible to analyse and calculate the development of the little hotel concern in Saudi Arabia, at least in a short- and mid-term position.
While working on the undertaking, the class stuffs have proved to be really helpful to me, particularly in respect to the selling research and debut of the merchandise. The selling research was grounded on my cognition of selling acquired in the class of my acquisition. I extrapolated my theoretical cognition on the existent life state of affairs and analyzed the current selling environment and selling place of Alsaad hotel every bit good as its chances in respect to the farther development of concern in Saudi Arabia and extension its web through closer cooperation with local providers and concern spouses. In this respect, lectures on networking were besides really important for me because they gave me insight toward understanding the development of webs in the modern-day diverse concern environment. As the affair of fact, I was witting of the fact that the little hotel did non necessitate the widely-spread web. Alternatively, it needed to develop its installations, whereas the forces of the hotel should concentrate on the development of the high quality of services being provided to clients. In such a state of affairs, I needed to understand different chances of the development of the web and talks helped me to widen my narrow position on networking. In fact, I arrived to the decision that networking can include the close cooperation of the little concern with its providers and other companies which are straight or indirectly involved in the concern. The development of the web turns out to be a really complicated procedure which goes beyond the everyday extension of concern, creative activity of new installations and enlargement of the substructure of the little hotel, like Alsaad hotel.
At the same clip, the talk on planning was the important talk for me because it helped systematically to form my work on the undertaking and to better the quality of my work. What is meant here is the fact that the development of the undertaking is impossible without elaborate planning. This is why, while get downing to work on the undertaking, I started with the definition of the end of my undertaking, its capable and creative activity of the program which helped to construct up the undertaking logically and coherently.
Furthermore, I am witting of the importance of stigmatization in the modern-day concern environment but I did non understand the full extent to which branding affects the public presentation of companies today. In fact, due to the talk on stigmatization, I understood that brands comprise an built-in portion of modern companies and they are of import assets companies can utilize to widen their market portion, enter new markets, pull new clients and derive the public acclamation. The development of stigmatization is important for the overall success of concern. This is why I understood that get downing up concern was inseparable from the development of a positive trade name image. To make a positive trade name image the promotional run entirely is non plenty. Alternatively, companies need to concentrate on the quality direction to make positive results in their public presentation and to carry clients in the dependability of their trade name. On the other manus, the failure of companies to make a positive trade name image leads to the failure of the concern development. This is why, at first, I took into consideration the possibility of franchising as an option to the creative activity of an independent trade name for my concern undertaking. In other words, I expected that franchising will ease the promotion of the little concern in the market due to the acknowledgment of the trade name under which the little hotel could work.
Finally, while working on the undertaking, I paid a batch of attending to the experience of other companies, who operate in the hotel and leisure industry and I studied attentively the larning stuff refering direction jobs, turnarounds, and corporate failure. In fact, I studied in inside informations the negative experience of other companies to avoid booby traps my concern undertaking could hold faced. In fact, the negative experience was really of import for me because it provided me with important information refering the development of effectual attacks to direction and concern start-up.