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Business Environment

The document provides an overview of the Taj hotel group in India. It discusses the history and founding of the Taj group, which began in 1903 with the opening of the Taj Mahal Palace hotel in Mumbai. It then analyzes the Taj group through a SWOT analysis and a PEST analysis of the hotel industry in India. It also examines Porter's Five Forces model as applied to the hotel industry. Finally, it discusses various external factors that affect the Taj group, such as economics, legal changes, technology, and competition.

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Arun Soman
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252 views

Business Environment

The document provides an overview of the Taj hotel group in India. It discusses the history and founding of the Taj group, which began in 1903 with the opening of the Taj Mahal Palace hotel in Mumbai. It then analyzes the Taj group through a SWOT analysis and a PEST analysis of the hotel industry in India. It also examines Porter's Five Forces model as applied to the hotel industry. Finally, it discusses various external factors that affect the Taj group, such as economics, legal changes, technology, and competition.

Uploaded by

Arun Soman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 13

BUSINESS ENVIRONMENT

To: Mr. Ravish Verma


Submitted by: Arun S
1

CONTENTS
S.NO

CONTENT

PAGE NUMBER

INTRODUCTION

SWOT ANALYSIS OF TAJ

PEST ANALYSIS OF HOTELS


IN INDIA

POTTERS FIVE MODEL

EXTERNAL FACTORS
AFFEECTING TAJ

10

CONCLUSION

12

INTRODUCTION
Indian Hotels Company Limited (IHCL), branded as Taj Group, is
a chain of hotels and resorts headquartered at Oxford House
in Mumbai, which was incorporated by the founder of the Tata group,
Jamsetji Tata, in the year 1903. This company is a part of the Tata
group, one of India's largest business conglomerates.
This company is a part of the Tata group, one of India's largest
business conglomerates. As of 2015, Taj Group operates 108 hotels
across India and 17 hotels in the UK, USA, Africa, Maldives,
Malaysia, Bhutan, Sri Lanka and the Middle East, and employed
over 13000 people in the year 2010. Taj Group also owns a few
private islands.

Jamsetji Nusserwanji Tata, founder of the Tata Group, opened the Taj
Mahal Palace, a hotel in Mumbai (formerly called Bombay)
overlooking the Arabian Sea, on 16 December 1903. It was the first
Taj property and the first Taj hotel.

Twelve hotels of the Taj group are members of the Leading Hotels of
the World. The following table is a list of those twelve hotels

HOSPITALITY BRANDS OF TAJ HOTEL GROUPS


Since the late 2000s, the Taj hotels' group started organising its hotels
into different brands, in a market segmentation strategy.

Taj/Taj luxury - The luxury brand is the erstwhile generic brand


of the Taj Hotels Resorts and Palaces. These hotels cover business
destinations, landmarks, palaces, resorts and forest destinations.
Most of Taj's oldest and most prestigious hotels have been retained
under this brand.
Taj Exotica - It is the resort and spa brand of Taj Hotels.

Taj Safaris - The wildlife lodges amidst the Indian national


parks and national parks come under this brand label. The brand
has modelled on the concept of sustainable eco-tourism.

Vivanta by Taj - Vivanta is a contemporary-luxury hotel brand.


The brand caters to an upscale market and is positioned a step
below the flagship Taj brand. Vivanta Hotels are found business
and vacation destinations as well.

The Gateway Hotels & Resorts- Gateway is a mid-market


brand, positioned below the Vivanta. It contains properties in
business and vacation destinations like Vivanta does. The Gateway
Hotel brand was created by Taj in its earlier market segmentation
effort and has been retained and expanded in the current wave of
brand-segmentation.

Taj Luxury Residences

SWOT ANALYSIS OF TAJ HOTELS


STRENGTH
Group comprises 93 hotels
in 55 locations across India
with an additional 16
international destinations
Employee strength over
13000 people.
The perfect experience of
Indian luxury living.
Employee retention due to
good brand image.
Considered to be the most
premium hotel chain in
India.
Top-of-the-mind brand
recall.

WEAKNESSES
Limited market share due to
tough competition from
international and domestic
players means
Terrorist attacks left a
question over the security

OPPORTUNITIES

THREATS

Introduce better
membership plans
Improve hygiene standards
Upgrade to international
methods of work

Other heritage properties


Competitors upgrading to
international standards of
work ethic
Expectation of clients in
terms of technological
development

PEST ANALYSIS OF HOTEL IN INDIA

POLITICAL
Eco-tourism- thrust
industry
Government pressures to
increase the security level,
add sewage treatment plant
etc.
Government promoting
tourism
Government permission is
no longer required for hiring
foreign technicians
SOCIAL
Increased extremism
Increase disposable income
Changing life style due to
exposure to global
environment
Urban middle class form
40% of total population

ECONOMIC
High growth in tourism
industry
Export Promotion Capital
Goods Scheme (EPCG)
Interest rates
Exchange rates
Inflation rate

TECHNOLOGICAL
Computerization
Global Distribution
System(GDS)
Real time access to
inventory, transparency
across multiple channels

From the PEST analysis it can be said that the political, social and
technological factors are good for the hotels in India but the economic
factors affect the hotels most in India.
As in the case of Taj Group they have been in the hotel sector for
about 113 years and have a great status and brand value. Taj Group is
advanced in technological factor. The political and social factors are
in the favour of them only economic factor affect them a little.

POTTERS FIVE MODEL


POWER OF BUYERS

Premium segments buyers less sensitive to prices


More sensitive to quality of goods offered
No concentration of buyers
Business customers have higher negotiating power for better
prices
Power of buyers- moderate

POWER OF SUPPLIERS
Property owners, developers and real estate companies, interior
design and furnishings companies, architects, management and
training service providers, marketing companies, industry
consultants and ICT manufactures
- Low concentration/large in numbers
- Switching costs are low to moderate
- Possibility of suppliers integrating forward negligible
Power of suppliers- low to moderate
THREAT OF SUBSTITUTES
Substitutes other forms for leisure accommodation. eg
camping facilities, RV, informal accommodation with family &
friends
- Switching cost can range from high (RV) to low.
- But no specific substitute for add-ons offered such as spas,
recreational facilities and quality restaurants.
Threat of substitutes- low
THREAT OF ENTRY
Capital intensive
8

- a large-scale upfront investment in real estate, buildings,


dcor & furnishings
- expensive staff
- Legal and financial complexities in the purchase, leasing, and
management of property
- Necessary spending on professional services.
Threat of entry: high
COMPETITIVE RIVALARY
High exit barrier due to difficulty in divesting tangible assets (as
specific to industry)
Mergers and acquisitions possible
Average Sales growth rate ( 23 % -2003-2008)
- Scope for individual players to grow
Few brand names in Luxury segments
- ITC , IHCL, Oberoi, Hotel Leela Venture, Asian Hotels Ltd.,
Radisson hotels & Resorts
Differentiations possible with innovations in offered service
Competitive rivalry: Moderate: overall
High: in metros
FACTORS INFLUENCING ROOM DEMAND FROM
LEISURE TOURISTS:

FACTORS INFLUENCING ROOM DEMAND FROM


BUSINESS TRAVELLERS:

EXTERNAL FACTORS AFFECTING TAJ


10

As Taj is a hospitality industry has a number of uncontrollable


variables that affects in management or ownership of hotels,
restaurants and other. Knowing these factors are is important for those
working in this capacity because it provides them with an opportunity
for contingency planning. Even though the variables cannot be
controlled their effects can be mitigated somewhat with careful
planning and anticipation.
ECONOMICS
As we look out to the economics of the India it is favour to the Taj.
Government is fully supporting tourism in India and spending more in
tourism to attract tourist towards India. And it is favouring the Taj for
their business. Not only in India the Taj group is expanding outside
the India also where have they had great scope. Even though the
economic variable cannot be controlled their affects can be mitigated
somewhat with careful planning and anticipation. Here also Taj has its
strength because they have an experience of 113 years in hospitality
industry.
LEGAL CHANGES
Changes in law can also affect companies within the hospitality
industry and cannot be controlled. For instance a change in tax laws
that raise the price of gas will affect tourism and cost for the
hospitality industry as well.
TECHNOLOGY
Technology continues to develop unimpeded. As new technology is
made available companies within the industry are forced to adapt to
the change or get left by the wayside. As we look at the Taj we can
see that hey adapt with latest technology and more advanced than
competitors.
COMPETITION

11

Competition is another factor that managing or owing business in the


hospitality field have little or no control over. As the factor of
globalization lots of MNC are there as a tough competitors to the Taj
Group. The 26/11 attack also affected the Taj because it have raised an
issue in the case of security and also the Taj has incurred loss of lot of
their main assets the employees and incurred a great loss. For that
time they are out of competition.
Major competitors of Taj are

CONCLUSION
Taj Group has 113 years of experience and they have a clear vision
and objective that is why they have been successful over years. The
external environment is the factors which cannot be controlled and the
Taj Group is very much effective and adaptive to the external
environment. In the past even after the 26/11 attack they have come
back with more advancement.
Below are the awards won by Taj by seeing this it can be concluded
that they are very much adaptive to external environment in order to
achieve those awards

12

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