INSTRUCTION: Answer the question given.

Read the case study BARON CHAIN OF HOTELS IN LANGKAWI 2013, and
prepare a comprehensive written analysis. You could follow the steps outlined here, which
correlate to the stages in the strategic management process and the chapters from the text
book. Comprehensive written analyses are usually about 10 pages in length, including
exhibits.
Step 1 Identify the firms existing vision, mission, objectives, and strategies.
Step 2 Develop vision and mission statements for the organization.
Step 3 Identify the organizations external opportunities and threats.
Step 4 Construct a Competitive Profile Matrix (CPM).
Step 5 Construct an External Factor Evaluation (EFE) Matrix.
Step 6 Identify the organizations internal strengths and weaknesses.
Step 7 Construct an Internal Factor Evaluation (IFE) Matrix.
Step 8 Prepare a Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, Strategic
Position and Action Evaluation (SPACE) Matrix, and Quantitative Strategic Planning
Matrix (QSPM) as appropriate. Give advantages and disadvantages of alternative
strategies.
Step 9 Recommend specific strategies and long-term objectives. Show how much your
recommendations will cost. Clearly itemize these costs for each projected year.
Compare your recommendations to actual strategies planned by the company.
Step 10 Specify how your recommendations can be implemented and what results you can
expect. Prepare forecasted ratios and projected financial statements. Present a
timetable or agenda for action.
Step 11 Recommend specific annual objectives and policies.
Step 12 Recommend procedures for strategy review and evaluation.

END OF QUESTION
BARON CHAIN OF HOTELS IN LANGKAWI - 2013

(Badruddin A. Rahman, Rajoo Ramanchandram, Cheng Wei Hin)

INTRODUCTION
The Langkawi archipelago is a cluster of 99 islands just off the coast of Kedah, close to Perlis
and just south of Thailand. Pulau Langkawi, noted for its legend and beautiful views, is the
most developed in the group. It has good beaches, abundant marine life and offers an idyllic
retreat from the urban jungle. I heard you just back from a summer vacation in Langkawi.
Tell me your experience and wheres the nice place to stay?. You can try the Baron.... its
quite an assuring experience. Two friends, John and Peter were communicating through
WhatsApp at their apartments near to the London Eye, South Bank of the River Thames.
The Baron Group comprised of six hotels and chalets of three-star rating, with almost 500
rooms in Kuah and Pantai Cenang, including the de Baron Resort with 137 rooms and Hotel
Baron with more than 40 rooms. The demand for rooms in Langkawi was never sufficient
especially during the festive season, the hosting of international events and the school
holidays. Langkawi had a total of 7,200 rooms capacity. During the recent management
meeting of the company, Zalina told her management team, It is timely to formalize
strategies and actions for the Baron. We ought to be responsive to dynamic change taking
place in our business environment. Our business needs to grow and sustain.
BARON CHAIN OF HOTELS
Founded by Haji Manaf, the Baron Group was able to provide a range hotel services to cater
for different needs of market segments, ranging from the lowest price motel type
accomodations to the higher end of three stars rating full fledged hotel accomodations. The
hotels were located in many tourists attraction spots such as near the Pulau Langkawis jetty,
Dataran Lang, Pantai Chenang beach, and Pekan Kuah.
Langkawi Baron Hotel (LBH) - Langkawi Baron Hotel is a town hotel with a total of 49
rooms. Its strategic location made the hotel the best destination for holiday shoppers. The
hotel was a perfect gateway destination, beautiful and scenic with magnificent view of sunset.
Peter, The hotel staff were friendly, but the breakfast was very poor for western tastes.
Malibest Resort (MR) - Malibest Resort was known as the "Soul of Cenang". The philosophy
was to create a Unique Experience to individual guests, providing them with a tranquil and
facinating hideaway. Besides the green garden this resort offered spectacular and charming
sea view. With 96 spacious rooms catagory gave customers a perfect holiday destination. It
was located in the southwest of Langkawi Main Island with only 10 minutes drive to
Langkawi International Airport and a 20 minutes drive to the Ferry Terminal of Kuah Main
Town.
Encik Samad from Muar had this to say, This was our 2nd time staying in Malibest. The
only reason we chose to stay here again was the beach. The rooms we booked were just a few
footsteps away from the sea when the tide is full. The views from our rooms were really
beautiful. The resort is also in the middle of Cenang area, however, if you expect a resort
quality stay here, you'll probably get disappointed. The rooms are not very big but spacious
2

enough for us. the bathrooms are just okay but the furniture in the room is really old.
Although the staff are really helpful and responded to our requests fast, we were not happy
with the front desk staffs who served us with sour looks. Will we come back here for our next
visit? Maybe not...
Langgura Baron Resort (LBR) - Langgura Baron Resort Pantai Cenang was another Deluxe
Resort offering another strategic and perfect holidays hideaway on the island of Langkawi. Its
room category comprised of both superior bricks and superior wooden deluxe offering
customers the perfect stay of its kind. The wooden Malay architecture chalets provided a
peaceful retreat and comfort.
Maniam of Maran, This property ensures guests with warm hospitality and great service that
also brings along various activities and fun. All the timber chalets and brick rooms are fully
equipped featuring basic amenities to provide utmost comfort to guests. The property features
an onsite open air restaurant with wide ranges of eateries, a convenience shop and a
conference and meeting hall to facilitate the corporate travelers. Langgura Baron Resort is a
perfect place for leisure and business travelers who wish to stay at a great location with
affordable price.
Best Star Resort (BSR) - Best Star Resort remained the best resort, located right in the heart
of lovely Cenang Beach of Langkawi. Cenang Beach was the most popular tourist destination
in the region. Overlooking the blue silent wave gave customers a perfect holiday getaway
with the nearby green island and the calming see breeze created miles of memories.
John, Good choice if you're on a budget. The rooms were generally clean though out of the 2
rooms I booked, one of the bathroom water heater was faulty. The rooms were also very basic
but complementary is given. The breakfast is passable at most, but if you're not fussy about
food, the free breakfast would be a plus for you. The resort is well located in the midst of the
stretch of restaurants, pubs and shops apart from being right beside the Cenang beach. There's
also a baron tour reception at the resort lobby, so if you're lazy to walk around for cheaper
options you can go ahead and book the tours they offer. Zila, a guide from the tour company
stationed there is also very friendly. WIFI is strong throughout the resort. Overall, theres
value for money for people travelling on budgets.
de Baron Resort Langkawi (BRL) - de Baron Resort was situated in the heart of Kuah . It was
only minutes walk to the jetty with ferry services to and from Kuala Kedah or Kuala Perlis
and 15 minutes drive from Langkawi International Airport.
Lingam of Pasir Raja, Good hotel with pleasant staffs. Good breakfast but very monotonous
in terms of variety. Near to Kuah town and other amenities. It has clean room and large
swimming pool. My children like very much. Plan to stay on next trip. Easy check in and
check out. Nice garden and easy parking. The hotels swimming pool like Infinity swimming
pool in Singapore. We can view the sea from the pool. Nice night view.
Baron Motel (BM) - This popular motel was situated in the heart of Kuah and was among
favourite choice of backpacking tourists.
Tony Tan from Singapore, The room was very small but very clean...located nearby to pekan
rabu jetty (for island hopping) and also not very far from jetty point just about 5 minutes
drive to Kuah town...there's a nice duty free shop behind the motel, and also fancy but
3

affordable restaurant nearby to jetty (walking distance from hotel) quite romantic to have
dinner...with Agoda's price the motel is a nice place to stay!.
Strategic Posture
The current objectives for the Baron Group were to achieve their targetted profit and sustain
it and also to stabilize their companies in the short term in order to cover operating costs.
They were still new in Langkawi, so in order to survive, they must achieve this target. This
was possible through achieving competitive advantage against competitors by expanding
their business and executing greater promotion of their brand names.
Management
In each of their branches, one manager was assigned to oversee the operational aspects of the
business. Their work was to ensure the smooth running of the daily operation, and to handle
any unanticipated problems that may cropped out. The General Manager for Baron Group
was Madam Zalina and the founder of the Baron Group was Haji Abdul Manaf.
ORGANIZATION CHART - STRATEGIC MANAGER
Hj. Abd. Manaf
(Founder)

Pn. Zalina
(General Manager)

Manager
de baron Resort

Manager
Best Star Resort Langkawi

Manager
Langkawi Baron

Manager
Langgura Baron Resort

Manager
Malibest Resort
Langkawi

Manager
Baron Motel

Figure 1: The Board of Directors and Management

Each of the Baron hotel chain is headed by a manager. Each of them was responsible for their
branches in the de Baron Langkawi, Laggura Baron Resort, Malibest Resort, Best Start
Resort, Langkawi Baron Motel and de Baron Resort. Their jobs were to ensure that business
processes run smoothly and to solve problems that may arise. Most of the chain managers
were related to the owner of Baron, namely Haji Abdul Manaf. Infact, the General Manager
for the de Baron Group, Mrs. Zalina is the daughter of Haji Abdul Manaf.

EXTERNAL ENVIRONMENT
Political-Legal
Langkawi Development Authority (LADA) played an important role in Langkawis tourism
industry. The objective of the Langkawi Development Authority(LADA) was to make the
tourism industry as a key, sustainable, viable sector thus making Langkawi Island the main
destination of tourism in the region. The declaration of free tax island of Langkawi had
attracted more tourists from other countries especially those that had four season
monsoonlike China and Brazil. The support of local government to encourage foreign tourists
to Langkawi and the country had also resulted in more tourists arrivals. The Ministry of
Information and Communication had also done a lot of promotion about beautiful places
located in Malaysia especially in Langkawi Island. On the other hand, the Kedah state
government must introduce the environmental protection laws to curb the prevailing rubbish
problem.
Income
Since the de Baron Resort began operation about three years ago, profits or financial position
had steadily increased year by year. The pace of development in the Langkawi as a tourist
destination had implications on the rate of tourists arrivals. Profitability and cash flow would
be enhanced when the school holidays and festive seasons started. School holidays and
festive season were the most effective and productive time for the de Baron Group to get high
profit from local and foreign tourists. Bookings for room accommodation, meeting rooms and
restaurant increased in these seasons.
Sociocultural
There were several factors that enable Langkawi to have a unique appeal to its patrons.
Langkawi had a green environment and attractive places such as Mahsury Tomb, crocodile
farm, Gallery Perdana, bird paradise, cable car, craft complex, sky bridge, oriental village and
the beautiful beaches. Based on interviews with several travel agents, the major attractions of
Langkawi were cable car, underwater world and households items that were cheaply available
at Ismail Group and Idaman Suri shooping complexes. Langkawi Island was the preferred
destination for foreign tourists from cold weathered countries. Langkawi Island was a
National Geopark recognized by the UNESCO and had been the focus of researchers.
Besides, Langkawi was also famous for water sports like snorkeling and scuba diving.
Langkawi Island hosted festive events like water festivals, Le Tour de Langkawi and LIMA
(Langkawi Malaysia International Airshow). These were the great attraction to the Langkawi
Island.
Technological
In terms of technology, it was more of a tool used to promote de Baron Group. As the de
Baron Group was a new company in the hospitality industry in Langkawi, de Baron used
Internet as a medium of instruction to promote their place. de Baron had been working with
several websites such as Langkawi online.com and www.triadvisor.com.my, a famous tourist
website. In addition, in term of facilities, de Baron was equipped with wifi system to make
easier for customers to communicate with the outside world. Facilities such as refrigerators

and televisions with Astro channels, were made available in the hotel rooms of the de Baron
group of companies, except for the motel.
Task environment
By the nature of their business, de Baron came into contact with the lives of many in the
community on a daily basis. To inculcate the spirit of caring and sharing, de Baron always
encouraged its staff to share their skills and talents in service of others by contributing their
time and energy voluntarily towards the Groups Corporate Social Responsibility (CSR)
activities. Charity projects, fund-raising events and donations had been the ongoing aspect of
operations as part of social commitment. de Baron constantly strived to improve the quality
of life in the workplace by focusing on their employees well-being and career development.
In order to improve on their productivity and develop their skill sets, employees were
encouraged to participate in various training and development program relevant to their areas
of work.
Competition
There were plentiful of affordable hotels in Langkawi especially in Kuah. Based on the
tourists brochures issued, these are among popular hotels highlighted:
Table 1: Popular Hotel and Pricing Per Night
Hotels / Resorts

Rating Price/Night from

Citin Hotel Langkawi

Bahagia Hotel
Langkawi Seaview Hotel
De Baron Resort
Sunderland Motel
Dsa Motel & Restaurant

3 Star
3 Star
3 Star
3 Star
1 Star
1 Star

MYR 104
MYR 76
MYR 213
MYR 164
MYR 59
MYR 46

Hotel Grand Continental

Hotel Langkasuka
Bayview Hotel Langkawi
Al-Taqwa Islamic Hotel
Eagle Bay Hotel
My Hotel
Azio Hotel Residences

3 Star
2 Star
4 Star
1 Star
3 Star
3 Star
2 Star

MYR 132
MYR 135
MYR 209
MYR 109
MYR 123
MYR 146
MYR 86

Customer Feedbacks
In view of the competitive nature of the industry, management of the de Baron Group
recently embarked on various actions to gauge customer perceptions with regards to
important factors affecting customer satisfactions. Amongs action plan undertaken included
regular distribution of questionnaires, engaging independent consultants to conduct survey,
and monitoring online feedbacks from various hotel booking websites such as Agoda.
Report from one of consultants mentioned that majority of the hotel guests came here for rest
and relaxation purpose and generally were satisfied with overall performance of the resorts.
The most attractive point was the reasonable pricing of the resorts. Nearly half of them love
the view from the resorts and this satisfied their needs. Somehow, there are a few respondents
6

who were not satisfied with the condition of air-conditioners that were not properly
maintained.
Most of the respondents think that their reservations of rooms were being handled
courteously and correctly and the front desk staffs were helpful. Somehow, the variety of
foods and beverages served were not satisfying. The rooms condition too need
improvement. The service upon arrival and check-in was generally acceptable with rooms for
improvement.
Most of the respondents made their reservation directly to the hotel instead of the travel
agencies or airline. The rating towards the resort or hotel staff was good with respect to their
responsiveness, courtesy, friendliness as well as communication skills. Somehow, there were
suggestion from some respondents for the management to upgrade the facilities and furniture
and increase the variety of breakfast.
Table 2: Agoda Website, Online Customer Feebacks (as at June 9, 2012)
Criteria
Value for money
Location
Staff performance
Hotel condition
Room comfort
Food and dining
Overall

B
M
8.
4
7.
4
7.
2
8.
2
8.
2
5.
4
7.
5

LB
H
5.6
7.8
6.4
6.4
6.4
3.8
6.1

LB
R
7.
6
8.
6
7.
2
7.
0
6.
6
5.
6
7.
1

M
R
7.
4
9.
0
6.
8
6.
8
7.
0
5.
4
7.
1

BR
L
7.
0
7.
8
7.
0
7.
0
6.
6
5.
4
6.
8

BS
R
7.4
9.2
6.8
6.8
7.2
5.6
7.2

Note: Scale used between 1 to 10 where 1 denotes lowest satisfaction and 10 denotes highest level of satisfaction .

INTERNAL ENVIRONMENT
Facilities
The hotel facilities are the most important factor of how a hotel is rated and how guests
choose the place that they want to spend their holiday. At de Baron, most of the hotels had
Wi-Fi, Internet, cable TV, refrigerators, telephones and others. People can easily surfing for
Internet in order to search for any information.

Financial Position
In term of financial position, de Baron Resort had strong financial performance due to strong
position of its founder. The increment of tourists arrivals due to promotion by government
agencies had created good revenues for most of the groups hotels. The group was able to
generate extra revenue by promoting extra activities to its customers.
Security system
CCTV security provided the ability to monitor the safety of tourist who stayed at de Baron
Group. CCTV would ensure a company could protect its customers, facilities and also
provide evidence in case of an incident. de Baron Group had staff to monitor the CCTV
security equipment. Using these tools, the management can quickly respond to a security
situation.
Information management
Despite having a website, it was still not easy to get information about the group. It has
actually affected the marketing strategy of the company.
Services
One of the most visible signs of a truly good resort was the friendliness of the staff. They
were very important as they were the very life and soul of the hotel. For de Baron Group, it
did not really had friendly crew or staff. The customers would really feel uncomfortable
whenever the staff seemed not happy as evident by the lack of smiles when customers wanted
to check in at the reception counter. This could give customers a negative first impression.
Infrastructure provided
de Baron Group faced the problem of not having enough transport such as vans and cars to
ferry their customers to tourist spots. For example, the company introduced island hoping
activity near the resort but it took at least fifteen minutes to reach to that place. Apart from
that, tourists had to wait for a long time for the public transportation.

PROSPECTS OF TOURISM IN LANGKAWI

Langkawi already had a strong tourism base, with steady year on year growth in line with its
peers. In 2010, more than 2 million people visited Langkawi, half of whom were international
tourists, producing estimated revenue of RM1.9 billion. From 2000-2009, Langkawis

tourism grew by 3.6% annually, inline with popular islands destinations like the Seychelles
and Mauritius.
The infrastructure in Langkawi would be enough to sustain the growth of tourism numbers. It
had sufficient capacity of land, electricity, water and sewerage. With this the tourism receipts
were expected to double from RM1.9 billion in 2010 to RM3.8 billion in 2015.
The Langkawi Tourism Blueprint 2011-2015 aimed to set Langkawi on the path towards
becoming a Global Top 10 island and eco-destination by 2015. The Blueprint was
underpinned by a call to improve public sector delivery: aggresive implementation of action
plan, strict enforcement of policies and regulations, close colloboration across federal, state
and local agencies and ongoing monitoring against Key Performance Indicators and targets.
Well...therere avenues for growth, perhaps we should focus on intensive strategies, Zalina
told her management team, while adjourning for lunch.