Banyan Tree Case Study

2530 Words11 Pages
Executive Summary Banyan Tree offers a unique experience with its hotel and spa experiences in the South East Asian region. Labeling itself as an aspirational brand, the company was established by the Ho family in 1992 and has boasted a gross profit of $52.1 million in 2006. Its superior branding, excellent corporate social responsibility practices and its careful investment and expansion strategies attribute to its success. As the company goes public it faces the new possibilities, offered through increased capital, and new challenges such as demands imposed by shareholders. How will the company continue to expand its profitability while preventing brand dilution through overexpansion? Key issues Branding Banyan Tree is an exclusive…show more content…
The concentration of business in this region exposes the company to risk should natural disasters or other crises occur in the area. Banyan Tree has a successful business model which could be replicated in other emerging tourist destinations globally. Banyan Tree should expand its operations outside of the area in order to diversify its operating risk. As Banyan expands its locations it must continue to ensure that hotels and spas are built surrounded by natural beauty, as this continues to be a key part of brand distinction. Initial Public Offering (IPO) Banyan Tree was recently offered as a publically traded company. This will allow an expansion of the company’s capital in order for it to continue expansion. It also changes the operating atmosphere the company faces. The shift from private investment to public investment requires some change in operating procedures as well as new demands from shareholders. Banyan needs to manage and meet these new demands while maintaining its core values and company image. Competition As South East Asia gains popularity as a tourist destination, both Banyan Tree and Angsana are facing increased competition. The Banyan Tree resorts face competition from other niche hotels, customer preference in this product category include quality, brand recognition, location and the scope of the amenities. As competition increases, customers tend to become more price sensitive as the
Open Document