HND in Business Management: Business Strategy

Acknowledgement

First of all, I would like to thank Almighty God for guiding me through this semester,
giving me the strength and blessing to overcome my difficulties.

I wish to express my sincere thanks to Mr. Wazim Imtiaz, lecturer of Business Strategy
for clearing and helping my question regarding the assignment. I am indebted to you, for
without you I would never have accomplished the task I was given to complete.

I place on record, my sincere gratitude to the E-Soft institute for giving me such a
wonderful opportunity to utilize my skills and talents. I not only learned many things
through this assignment but now I have a proper intellect about the life outside the books. I
was able to learn and study about the practical world as well.

I take this opportunity to thank all the faculty members and staffs of this organization
for all their help and encouragement, especially Mr. Raam, our coordinator for his support
and dedication he had towards us.

Last but not least, I would like to thank my friends and family for their support and
help. No matter when or what I wanted, they were there to help me out without saying a no
for an answer. I wouldn’t be here writing this acknowledgement if it wasn’t for their belief in
me and my works.

This is the first step of the journey I am taking for a successful life. Thank you for all
your support, and I humbly ask you to keep on believing and encouraging me for, I am no-
one without any of you.

THANK YOU. 

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Executive Summary

Every business has a vision, mission and objectives and their aim is to achieve their
vision through their mission and objectives. Hence these objectives must be acceptable, for
they also act as a guide line to both the employees and the customers of the company.

In order to know how far the company is from reaching its vision, we can use some
tools to analyze the position of the organization in the market and the product portfolio
strategies. This will give us a clear picture of how far the company needs to go. Also through
internal and external analysis, we can find the positive and negative factors which affect the
industry from within and outside. This will further help the company to know its strength
and weaknesses and ways to increase and minimize them.

Also using gap analysis we are able to find the reasons for the current position we
are in and what is the position we want to achieve. This analysis is a great opportunity for
every company to find more ways to achieve their targets at the expected level with loosing
anything.

These analysis tools are very important for without these a company won’t be able
to know about its performance.

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Contents
Acknowledgement ................................................................................................................................... i
Executive Summary................................................................................................................................. ii
1. Introduction ........................................................................................................................................ 1
1.1. Vision, Mission, Objectives and Values of Island Leisure............................................................. 2
1.1.1. Vision..................................................................................................................................... 2
1.1.2. Mission.................................................................................................................................. 2
1.1.3. Objectives.............................................................................................................................. 2
1.1.4. Values.................................................................................................................................... 4
1.2. Internal Analysis........................................................................................................................... 5
1.2.1. Value Chain Analysis: ............................................................................................................ 5
1.3. External Analysis .......................................................................................................................... 7
1.3.1. PEST Analysis......................................................................................................................... 7
1.3.2. Porter’s Five Forces:.............................................................................................................. 9
1.4. Corporate Appraisal of Island Leisure........................................................................................11
2.1. Position of the Organization ..........................................................................................................12
2.1.1. Directional Policy Matrix.........................................................................................................12
2.1.2. Ansoff’s Matrix........................................................................................................................14
2.2. Product Portfolio............................................................................................................................16
2.2.1. Boston Matrix..........................................................................................................................16
3. Business Plan.....................................................................................................................................17
3.1. Business Plan (1) ........................................................................................................................17
3.2. Business Plan (2) ........................................................................................................................18
3.3. Ways to reduce the Planning Gap..............................................................................................19
4. Business Ideas ...................................................................................................................................20
4.1. Strategic Choice .........................................................................................................................22
4.2. Selecting a Business ...................................................................................................................24
Conclusion.............................................................................................................................................26
Reference ..............................................................................................................................................27
Appendix ...............................................................................................................................................28
Bibliography ..........................................................................................................................................35

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Tables, Figures and Graphs

Table 1: SMART Objective....................................................................................................................... 3

Table 2: Value Chain Analysis.................................................................................................................. 6
Table 3: SWOT Analysis of Island Leisure..............................................................................................11
Table 4: Ansoff's Matrix ........................................................................................................................14
Table 5: Boston Matrix..........................................................................................................................16

Figure 1: Value Chain .............................................................................................................................. 5

Figure 2: Porter's Five Forces.................................................................................................................. 9
Figure 3: Directional Policy Matrix Calculation.....................................................................................12
Figure 4: Directional Policy Matrix Analysis..........................................................................................13

Graph 1: Business Plan (1) ....................................................................................................................17

Graph 2: Business Plan (2) ....................................................................................................................18

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1. Introduction

Sri Lanka has a growing tourism industry. Since gaining independence from the
British in 1947, Sri Lanka has continued to attract foreign investors and tourists to the island.
The country's important placement also enables it to attract transit visitors into the island.

Over the years, many beautiful resorts, hotels and spas have opened. Incorporating
the diverse culture of the country, the various Tourist Establishments here offer visitors a
unique, yet memorable experience to remember with.

Island Leisure Lanka (Pvt) Ltd which is driven by a service oriented vision with a
modern management style, the company has made it is business, to exceed customer
expectations. This aptly reflected in the motto – ‘Your Professional Destination Partner.’ The
result is a vibrant atmosphere, wherein respect, genuine concern, reliability, willingness to
serve and friendliness flew unabated, between the company’s personal and their customers
and as well as individual operators. They handle most of the corporate, Cricket, Golf,
Religious tours and large scale of MICE tours in Sri Lanka.

This report is an analysis of Island Leisure Lanka on its internal and external factors
which help them or preventing from succeeding their goals and objectives. Also through this
we analyze the current position where this company is working at in the market and the
strategies they use to provide their service. Through this we will be able to conclude the
performance of the business and ways to achieve their vision.

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1.1. Vision, Mission, Objectives and Values of Island Leisure

1.1.1. Vision

“To become the leading inbound operator in the country and our clients’ best partner
providing them innovative receptive tourism solutions, guaranteeing top quality services that
commit to sustainable tourism.”

The statement gives voice to who they are and what they are striving to achieve. Island
Leisure emphasizes on becoming the leading inbound tour operator in their country through
providing quality services to their clients. The major aspect of their statement is to provide
innovating tourism solution to their clients and to become their partner.
Their vision is indeed acceptable for they clearly state they want to be dominant only in the
inbound tourism sector. Also the way they plan to achieve is also viable for they target on providing
innovative and quality service to their customers. Quality is indeed a major aspect which should be
provided but it alone is not enough to become the leading operator. They must afford their service
with quality and affordable price for their clients, these two dimensions are very important in a
market, for the success of an organization mainly depends in these factors.

1.1.2. Mission

“To provide social and environmentally responsible incoming tourism solutions in Sri Lanka,
satisfying the desires of our clients, exceeding their expectations and turning their visit
into a memorable experience.”

The mission statement of Island Leisure, defines the organization’s primary purpose which is
“satisfying the desires of their clients”. This statement is clear and succinct and also provides a sense
of direction. They also clearly mention what their product is (Sri Lanka) and their service (inbound
tourism), how they want to provide the product to their clients that is by giving a memorable stay in
our country.
The mission statement is also a guide line to the employees; it shows what they should do
and how they should do their tasks. And this statement clearly explains the necessary details the
employees should know. It is a viable mission statement.

1.1.3. Objectives

1. To manage all the travel requirements while providing ease and sort of convenience to the
customers.
2. To add value to the travel sector
3. To offer the traveling services at very reasonable prices

All businesses need to set objectives, objectives are important they focus organisations. Businesses
that have specific aims are usually more successful than those that don't; because a business with
objectives knows what it is trying to achieve. Hence these objectives should be S.M.A.R.T.

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They have mentioned what they want to do and achieve but they have
specifically mentioned how they want to do it. The (1) objective mentions
that they want to provide ease and convenience but they haven’t specified
Specific
how they will do it. It is the same for objectives (2) and (3); they haven’t
specified how they are going to achieve those objectives.

These objectives are not measured, for they haven’t mentioned by how
much they are going to achieve their objectives. They could measure by
stating a certain amount for each objective. For an example they could say
they want to add value to the sector by 10%.
By measuring the objectives, the company can know how far or near they are
Measurable
to their objectives. Through this they can increase or maintain their current
performance. Since these objectives are not measured, the company has to
keep working on without an end, for they only know the path but not the
destination.

These three objectives are achievable, providing ease and convenience to

customers, providing at reasonable price and adding value to the sector are
all achievable objectives.
To be more precise these goals can be achieved but cannot be completed for
Achievable you can always keep adding value, provide tours at reasonable price. These
objectives will keep deriving the company to move forward than before. But
without knowing when your goal is complete (mentioned at measurable) you
cannot say you have achieved and completed your objectives.

These objectives are indeed realistic, for they can and have the ability to
work towards those objectives.as I mentioned above, these objectives are
achievable hence they are realistic.
Realistic
The available resources and the management skills and experience make
these objectives realistic.

Timing is very important. The company’s objective may be achievable but

without knowing by when you have to achieve them, those objectives are
not effective. The company can keep working for many years to achieve
Timely those objectives but without the due time, those objectives will be kept on
being delayed from achieving.
Time is money and it is precious, hence whatever the objective is/are it
should be timed.
Table 1: SMART Objective
The above mentioned objectives of the business are not smart, hence it is advisable for the company
to go through those objectives again and come up with a more S.M.A.R.T. objective which will guide
the business in a clearer path.

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1.1.4. Values

 Integrity: We adhere to a personal and professional code of ethics founded on honesty and
fairness
 Customer Service: We are dedicated to providing exceptional customer care.
 Expertise: We continually pursue greater knowledge both within and beyond our specialties.
 Teamwork: We provide a challenging and respectful work atmosphere where employees
thrive and express their abilities for the benefit of all.
 Longevity: We plan and invest for growth and success.

Values educate clients and potential customers about what the company is about and clarify the
identity of the company. Their values; integrity and customer service speak of the clients, these
values show how they want to provide their service and product to their customers.
These values are also used to recruit and retain employees into the company and the value
teamwork elaborates about how the company acts and works with its employees.
Also the values; expertise and longevity speak about the company, where they show that they
want to keep moving and improving their business.

Hence these values speak of the company’s customers, employees and itself, giving a clearer and a
broader picture of how they work and how they want to achieve their vision.

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1.2. Internal Analysis

Purpose of an internal analysis is to use the information for strategic planning, meaning the
company's plan for furthering growth, success, and leadership in the marketplace. Determining the
business's strengths and weaknesses translates into the steps necessary for achieving goals.

1.2.1. Value Chain Analysis:

Figure 1: Value Chain

Refer appendix 1.2.1 for the meanings

The Island Leisure is a small scale company with

a centralized organizational structure where all
the decision making power remains with one
Firm Infrastructure person. But the management is has more
experience and knowledge in the industry which
allows it to make proper decisions.

The company does not possess a HR department

which is a major flaw of the business, due to this
this reason the performance of the employees
HR Management
are not measure systematic way and is always
biased.
Support Activity
They also have lack technological advancement,
where they have to do most of the operations
manually (for example: vouchers are hand
Technology Development
written while some other companies use system
generators)

They have good and well known supplier which

help them provide necessary materials and
service for the company. Also the strong
Procurement
contacts with other agents and hoteliers help
them improve their service.

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The cost for bringing in inventory is high since

they have to outsource that service. Also the
storage to keep their inventory is small and not
Inbound Logistics
spacious which is not a suitable. This will result
in wastage and increase in cost.

Even though they have a small number of

employees, the operations are conducted
Operations efficiently due to support and specialization they
possess in the market.

In order to provide their service, they do not

have their own vehicles and due to this reason
they have to outsource transportation. This
increases the cost of their service threatening
Outbound Logistics them to lose their business. Also many
competitors have their own logistics which
provides a competitive advantage over Island
Primary Activity
Leisure.

Being in the market for long time, they were

able to identify the needs and habits of each
market they handle. But still the awareness of
the company is very low due to the lack of
Marketing & Sales
marketing strategies they practice. This has
made them lose many opportunities which they
could have grabbed.

The Island Leisure has a strong relationship with

their customers which give an added value for
their business. Making the customers to be a
part of them through feedbacks, they are able to
Service
enhance their service. Also providing with
complementary service such as; dinner and
other facilities, they add value to their service.

Table 2: Value Chain Analysis

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1.3. External Analysis

The External Analysis examines opportunities and threats that exist in the environment
outside the company. Both opportunities and threats exist independently of the firm.

1.3.1. PEST Analysis:

Political Factors:

Tour operators have to operate within the framework of laws set by government, and that’s
why it depends on political considerations. Government plays vital role by imposing the law and
regulation on the companies. Government set standard laws for companies that has to meet
otherwise they have to pay fines.
 Health and Safety Act. (insurance)
 Government laws and regulation in accounting standards.
 State, local, foreign environmental laws and regulations.
 Minimum rate requirements
 Registered suppliers (logistic provider)

Economic Factors:

The economic factors plays major role when it comes to tourism industry, for the growth
and decline of this sector entirely depends on these factors. The following factors have huge effects
on the sectors and shape it.
 Country inflation rate.
 Economic growth rate.
 Currency exchange rate.

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Sociocultural Factors:

Social or cultural environment has great impact in this industry. In this sector we, Island
Leisure Lanka deal with many customers around the world with different cultures and habits. The
suppliers (travel agents) should know what their customers prefer and provide them with tours
which are suitable for them. Below are few sociocultural factors which affect travel agents.
 Language.
 Religious beliefs.
 Food.
 Clothing.
 Lifestyle.

Technological Factors:

Technological change has the most rapid, persistent and profound effect. It creates
opportunities for efficient and effective service which could be provided to customers and supplier
on time.
 The internet.
 Computerized voucher generator
 Orders via telephone or online.
 Computerized records and costing of tours

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1.3.2. Porter’s Five Forces:

This model identifies and analyses 5 competitive forces that shape every industry, and helps
determine an industry's weaknesses and strengths.

Figure 2: Porter's Five Forces

1. Potential of New Entrants into Industry:

The tourism sector of Sri Lanka keeps growing continuously and due to this reason
the potential of new entrants into the market is very high. The barrier to entry is
considerably less compared to other industry; you could start up a travel agent with a
considerable amount of capital. Also as per the collected information (received from my
senior colleague), those who start up new travel agent are most likely higher up people
worked at leading tour companies. Hence the threat of new entrants is very high.

2. Threat of Substitute Product:

In this industry, direct hotel service and other online sites could be considered as
substitute where the customers directly book the hotel through internet. This is huge threat
to travel agencies. But the distinct advantage we possess is when a customer is unaware of
his tour about Sri Lanka; they tend to seek the help of travel agents to organize their tour.

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3. Bargaining Power of Suppliers:

The suppliers of a travel agency would be the hoteliers and logistics provider. The
hoteliers do not have much bargaining power because their rates are fixed at each period
but when it comes to negotiation of rates with them, their power could be considered
seasonal. The rates could be easily negotiated during off peak season while it is vice versa
during the peak periods.
But the bargaining power of logistics provider is considerably limited for they have a
low amount of business. Many travel agents now owns their own logistics, hence the
bargaining power of logistic provider is considerably low.

4. Bargaining Power of Customers:

The business in the travel industry solely depends on the price we provide our
customers and the bargaining power of the customers is very high. Even a slight change of
price with another competitor can make us lose or grab the business and customers always
demand for low price frequently. Hence when it comes to bargaining power of customers,
the customers are always on top.

5. Competition in the Industry:

As I mentioned earlier, the travel sector is a fast growing industry and in the past
couple of years the number of competitors in the industry has risen quite a lot. Many keep
entering the market and it has become very competitive to survive in the market.

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1.4. Corporate Appraisal of Island Leisure

Positive Negative
Strengths Weaknesses

 Experienced management  Less number of employees

 Handling of all sorts of tour  Decision making Power based on one person
Internal

 Specialized in sports tour segment  Delegation is very low

 Reliable and trustworthy contacts  Awareness of the company is low
 Employ satisfaction and motivation is low
 Lack of physical resources

Opportunities Threats

 Can take up outbound tour operating  New entrants of tour operators

 Increasing arrival of tourists  Large number of existing tour operators
External

 Availability of new and untouched  Uncertain change of taxes

markets  Government policy changes
 Government support for the industry
 Improvements of infrastructures

Table 3: SWOT Analysis of Island Leisure

Refer appendix 1.4 for more details regarding SWOT analysis

As you can see, the strengths of the business are low compared to its weaknesses but using
those strengths the company can minimize those weaknesses. For an example; the decision making
power solely depends on the management but the management can make more accurate decision
through their experience and knowledge of the industry. In such ways the company can use its
strength to its advantage and reduce or convert their weakness to their own benefits.
Also the company has many opportunities and they must try to grab onto these
opportunities and wave off the threats in the industry. Travel sector is a very strong industry with
many emerging opportunities as well as threats but using the proper strategies you can overcome
those threats and make those opportunities into your strengths.
In simpler terms they must absorb in their weakness through their strength and wave off
their threats by utilizing the opportunities available.

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2.1. Position of the Organization

Your business does not operate in isolation. You are affected by your competitors. You, your
competitors and your customers are affected by external influences beyond your control. You need
to analyse where you stand in the market, hence you can make decision on how to improve your
current position and move forward.
You can use several methods to find out the position of your organization and among them
the following two are well known analytical tools;
I. Directional Policy Matrix
II. Ansoff Matrix

2.1.1. Directional Policy Matrix

Attractive

50%
BUSINESS SECTOR PROSPECT

A
Average

50% -50%
0%
Unattractive

-50%

Strong Average Weak

BUSINESS POSITION

Figure 3: Directional Policy Matrix Calculation

Refer appendix 2.1.1 for calculations

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Double

Attractive
Try
Leader or
Harder
Quit
BUSINESS SECTOR PROSPECT

Leader / Growth / Phased

Average

Growth Custodial Withdrawal

Unattractive

Cash Phased Divest

Generator Withdrawal

Strong Average Weak

BUSINESS POSITION

Figure 4: Directional Policy Matrix Analysis

As you can see in the above graphs, the business position (strength of the business) is
average while the business sector prospect (attractiveness of the industry) is very attractive, hence
Island Leisure falls under “try harder” segment which means the priority for investment is very high.
They are still at the bottom of “try harder segment”, where they could fall to “double or quit” if they
lose their business strength. They have more potential increase their business strength and move
forward towards being a leader, where they can become more competitive and lead the market.

In order to achieve and become leader, the company must invest more on its growth; by
bringing more resources into the firm, providing more training to its employees to increase their skill
and knowledge, increasing the quality of service and also by gaining more market shares through
going into new markets. (Refer appendix for the weight of the business position)

As I mentioned earlier, the business is in an acceptable segment but it is still not good
enough. They have to invest more in order to gain a higher and leading position in the market.

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2.1.2. Ansoff’s Matrix

EXISTING PRODUCT NEW PRODUCT

Market Penetration Product Development

EXISTING MARKET

Market Development Diversification

NEW MARKET

Table 4: Ansoff's Matrix

I. Market penetration

This is where the business or firm try to acquire more market share of the current market
through their existing product or service.
 Sports Tours, Leisure Tours and MICE

Currently Island Leisure is using this strategy to promote its Leisure, MICE and Sports tours in its
existing market at a lower price and quality service. Being specialized in these segments gives them
an added advantage and good success rate for this strategy.

II. Product development

As the name itself suggests, this strategy involves in developing a new product for the existing
market and gain customers.
 Medical and pharmaceutical conference marketing

Medical conference marketing is a new segment they have undertaken where they plan to
market conferences of medical association in Sri Lanka internationally and bring participants from
around the globe. This is entirely a new service which they target to sell to the existing markets
where they do business. The success rate of this strategy is very less because this segment is entirely
an unknown area for them.

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III. Market development

This is where the business or firm tries to establish their existing product in a new market.
 Australia and Israel

This is also another strategy they have undertaken in order to promote their existing product to
new markets such as Australia and Israel. This is a very good strategy since these markets are not
handled by everyone, but the success rate would be less because the market behaviour (what they
prefer and what they want to do) is not familiarized. The beginning of this strategy might shows
some challenges but it could be a successful strategy if they manage to study about the market.

IV. Diversification

This is where the company develops a new product and targets to sell it in a new market. This is
a very risky strategy for the success rate is very low.

Island Leisure has not undertaken any steps to produce new service to new market since the risk
is very high.

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2.2. Product Portfolio

Portfolio is a collection of businesses that make up an organisation. Business portfolio should be

compatible to strengths and opportunities faced by the company.
2.2.1. Boston Matrix

Table 5: Boston Matrix

MARKET SHARE MARKET SHARE

HIGH LOW HIGH LOW

Leisure Tours
HIGH

HIGH
MARKET GROWTH

MARKET GROWTH
Star Question Mark -
MICE

Adventure
LOW

LOW
Cash Cow Dog Sport Tours
Tours

Refer appendix 2.2.1 for the functions of each segments

 As per Boston Matrix, sports tours (especially cricket) are the cash cow of the company, for
they have high market share due to the less number of companies who handle them and the
market growth of sports tour is low.
 As for the question mark, leisure tours and MICE tours falls under that category. Market
growth of leisure and MICE tours keep on increasing but the market share of the company in
that sector is comparatively low.
 The adventure tours is considered as a dog for it has been recently started by the company
and the market share is very less for them due to the number of competitors who handle
that and the market growth for that particular sector is very low.
 But the company does not possess any stars which have high market share and growth. It
could be considered a disadvantage for the company.

Unlike products, this is a service industry and customers look forward for tours which are
less expensive and attractive. Hence investing is not a reasonable option available here which can
turn the question marks into stars. But since the company have a cash cow which is the sports tours,
they can reduce the profit margin of their leisure and MICE tours. This way they can grab the market
share and turn the question mark into stars.
As for the dog which is the adventure tours, it is best to liquidate and give up on that
segment as per the Boston matrix. But my advice is to keep on promoting the adventure tours. It is a
new segment for the company and also a potential segment. There are customers who prefer to go
on adventure tours which are more interesting and enthusiastic. Hence the company can do some
promotion to expand the adventure packages and search for markets which are more interested in
it.

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3. Business Plan

Set of documents prepared by a firm's management to summarize its operational and financial
objectives for the near future and to show how they will be achieved. It serves as a blueprint to
guide the firm's policies and strategies, and is continually modified as conditions change and new
opportunities and/or threats emerge.

What is business plan? definition and meaning. 2013. What is business plan? definition and meaning.
[ONLINE] Available at: http://www.businessdictionary.com/definition/business-plan.html. [Accessed
26 October 2013].

3.1. Business Plan (1)

Gain an annual profit of 2 million rupees as at 31/12/2013

Current Profit
Planning Gap on Due Time

A
Profit

Expected Profit

C B Graph 1: Business Plan (1)

Time

The profit expected to be generated as at 31st of December 2013 is 2 million rupees, but
they managed to achieve that target before the due time and currently have generated a profit of
2.6 million rupees than the expected profit.
As you can see in the above graph, the company has reached its target by saving BC amount
of time. This could mean that the efficiency of the business has increased a lot, allowing them to
reach their target at a faster span of time than anticipated. Also at the current moment they have
generated A amount of excess profit, giving them an opportunity of gaining even more profit before
the due date of expected profit level, allowing them to utilize the time available for them (B)
effectively and efficiently.

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3.2. Business Plan (2)

Marketing of the company and increase the UK client by 100% since last year by the end of
31/12/2013

Expected Level

A
Marketing Success

Planning Gap on Due Time

Current Level

Graph 2: Business Plan (2)

B

Time

The second business plan of the company is to increase its awareness in the UK market by
100% compared to the previous year as at 31st of December 2013. But they were only able to
increase the awareness by 40% by the current time.
Shown in the above graph are the expected level and the current level of marketing success
as per the time period. The difference between the success level is illustrated through the letters AC.
The company currently have B amount of time to reach their expected level. Using the remaining
amount of time they can still increase their awareness by another 30% - 35% the least.
As per the collected data, the causes for this gap are the marketing plans they undertook
and the lack of knowledge about marketing for the employee who was assigned with this task. This is
indeed a disadvantage to the company; this could result in decrease in their business and loss of
market share. This also has made them loose many opportunities which they would have been able
grab during the process.

The primary method they selected was web marketing, making awareness through classified sites of
UK and other tourists’ sites. Also their website was recently refurbished and came online and is still
incomplete. Since it is a small scale company with only 5 employees, all these web marketing and
website updating was assigned to single employee who lacked knowledge in the field of marketing
but had great knowledge of IT.

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3.3. Ways to reduce the Planning Gap

Business Plan (1)

Even though it is appositive planning gap, it is not good for the business, for the motivation of the
employees will decrease since they have already reached their goal. Also it means that the
management did not possess proper details regarding their company, also the tax payment will b
high. The following methods can be used to reduce the gap, as well as maintain efficiency and
improve the business further on.

 Decrease the profit margin and sell the service to the customers at a lower price, so that
customer satisfaction will also increase and this will allow grabbing the business on a
competitive situation.
 Investing and bringing more resources into the company, such as; faster computers and
automated systems which will increase the efficiency and effectiveness of the company.
 Providing bonuses for employees as it acts as a motivational factor for employees to work
harder and retain in the company for longer.

The above mentioned methods will allow reduce the planning gap and maintain a stable level.

Business Plan (2)

If they keep at this pace, the company will not reach the expected success level for their marketing
plan. This will result in loss of opportunities, hence we can use the following methods to reduce the
planning gap and reach an optimum level.

 Outsourcing the web marketing operations to a web developing company who is specialized
in this segment.
 Hire someone who has good E-marketing skills and knowledge. This method is useful in a
long-term process as well.
 Providing employees with training so that they can specialize themselves in that specific
task, which will be an added advantage for both the employee and the company.
 Revise the marketing plan and reorganize it by filtering the flaws plans.

Even if they are unable to reach the expected level in time, they will at the least be able to achieve a
greater level by the due date than whether they currently are.

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4. Business Ideas

Analysing the prevailing markets and available opportunities, we were able to bring up new business
ideas through a brainstorming session. Following are the ideas brought up:

1. Opening a Medium Scale Resort:

The tourism sector keeps on growing exponentially. There are many places
frequently requested by the travellers but unable to visit due to lack of places for accommodation.
By targeting a most visited or requested area, we might able to succeed in our business.

Target market Local and international tourists

Growth rate of the market High
Competition High
Competitive advantage Knowledge about the travellers and their preference
Estimated capital 7 million rupees

2. Textiles Manufacturers:
The design, manufacture and export of textiles and apparel products is one of the
biggest industries in Sri Lanka, and one which plays a key role in advancing the country's economy.
Also the biggest advantage of opening up a textile is that the Sri Lankan labour force is easy to train.

Target market Domestic Clients (both high end and low end)
Growth rate of the market Average
Competition Very high
Competitive advantage -
Estimated capital 7 million rupees

3. Restaurant:
Fast food industry is a very profitable sector. Nowadays people tend to eat at
restaurants more frequently than at their homes due to their busy life. Starting up a restaurant at
the appropriate are will gain us a successful business.

Target market Families and tourists

Growth rate of the market High
Competition Medium
Competitive advantage Location of the restaurant
Estimated capital 4 million rupees

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4. Web Developing & Maintaining Company:

In today’s world, all the businesses operate through online. From small scale to large
scale businesses has its very own website. These web developing and maintaining are mostly
outsourced and makes a profitable business.

Target market Business (small and medium scale)

Growth rate of the market High
Competition Medium
Competitive advantage -
Estimated capital 5 million rupees

5. Sword Fighting Academy (Kendo):

This is a rare segment in Sri Lanka, implementing a unique business will enable to
dominate in the market and make successful business. But the risk of failure is also the same as the
success rate.

Target market Teenagers and Women

Growth rate of the market Uncertain
Competition Very low
Competitive advantage Unique business
Estimated capital 3 million rupees

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4.1. Strategic Choice

Among the above mentioned six business ideas, there are three ideas which are better and
suitable compared to the others. Those ideas are as below:

 Opening a Medium Scale Resort

 Opening a Restaurant
 Opening a Sword Fighting (kendo) Academy

I. Opening a Medium Scale Resort

Sri Lanka is known to many as the finest island in the world. For centuries it has been a
major tourism destination for Europeans. The natural structure and traditional culture of our country
has won the hearts of many tourists. Due to the internal war conflict, the rate of tourist arrival fell
drastically over the past 30 years. But since the end of the war, the arrivals have flourished. Now the
tourism industry is one of the leading industries in the country.
Now the ideal places for us to open up a resort are Pasikuda and Anuradhapura. If we target
the Indian and the Middle East market, Pasikuda is the best place to open up for many tourists from
these countries (especially India) prefer to stay over there. But if we target European and Chinese
Market, the ideal place would be Anuradhapura. Also the competition is low at these places, which
will allow us to grab business. If we make a boutique type resort we can easily succeed in the
business.
But even among these two places, Pasikuda is more suitable because of the beaches and
acts as a mind relaxing place to spend the vacation for both locals and foreigners.

II. Opening a Restaurant

The food and beverage industry in Sri Lanka has become a thriving sector, thus, for the food
and beverage industry is highly optimistic given the country's stable macroeconomic environment
and the government's commitment towards maintaining a high growth path in the medium term.
When opening up a restaurant we should consider about the location. Colombo isn’t an ideal
place to start a new business in F&B due to the high level of competition prevailing. But opening up a
restaurant at Nuwara Eliya is a more suitable option since there are not many places to dine at.
Nuwara Eliya is also a famous tourist spot for both locals and foreigners, setting up a business there
will help improve your success rate. You also have the opportunity hire labours at considerably lower
cost and can also buy goods (vegetables) at a lower price.

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III. Opening a Sword Fighting (Kendo) Academy

Kendo, meaning "Way of The Sword", is a modern Japanese sport/martial art, which
descended from traditional swordsmanship and uses wooden swords, and protective armour. Today,
it is widely practised within Japan and many other nations across the world. Kendo is a physically
and mentally challenging activity that combines martial arts practices and values with sport-like
strenuous physical activity.
This is a unique and new segment for the country. Currently in Sri Lanka we only have
fencing and archery but not sword fighting. By targeting young teenagers both boys and girls, we
could make this a success. Many teenagers like to lean sword fighting and are interested in it; this
will give us a great advantage to gather customers. Also we could market it to girls as a form of self-
defence and exercise.
Since this is a new sector in the country, we could dominate in a great manner.

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4.2. Selecting a Business

When it comes to starting up a business, there are many criteria’s to be looked on to. But
among them there are few which are more needed to be considered;
 Cost of opening the business
 Time needed to establish
 Knowledge required
 Return of the business (profit)
 Success rate
 Competition
If we analyse these criteria with the selected businesses, we will be able to select the most
appropriate one among them.

Cost of opening a business:

No matter what business you start there will be costs involved to start up that specific
business, in other words capital. If we plan to open up a resort or a restaurant, the cost is much
greater than starting a kendo academy (estimated capital is mentioned above). You have to buy or
rent land or building, necessary equipment, inventory, furniture, etc. if you don’t plan out the
budget properly, you might end up delaying your work.

Time Needed to Establish:

To start a business it will take a lot of time for there is much legal legislation you must
complete in order to get the approval to implement your plan. After receiving the approval, you will
need to start building your business. Comparatively the time needed to open a resort is higher than
the other two plans.

Knowledge required:
You can simply start a business just when you have the required financial resources but you
cannot run it if you don’t have the knowledge regarding that. In order to start a kendo academy you
must possess knowledge about it, it is same with opening up a restaurant and resort.

Return of the Business:

The reason for starting up a business is to earn profit, if we cannot generate profit there is
no use of starting that business. The return rate from resort and restaurant is very high compared
with kendo academy. Since the kendo academy is a new market and only targeted at a young age
group, the profit will be less.

Success rate:
As we know, the F&B industry and tourism industry are currently fast growing sectors in Sri
Lanka; hence the success rate is very high for these two. But the success rate of Kendo academy is
same has its failure rate because this is a new product and we cannot estimate its success rate.

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Competition:
Is it best to get into a market whether there is competition or whether there is no
competition? My answer would be it best to enter a market with competition, for this will be a
motivational factor for you to work efficiently. Entering a market where there no competition mean
it is a new product like the kendo academy, you can be the monopoly and be the only one to
specialize in that market for some time but the you will have a lot of cost on marketing your
company for people will not be aware of it.

As per the analysis, we could narrow the option to two; either opening up a resort or a
restaurant for bringing in an entirely new business is very risky if this is you first and only business.
If I am opening up a new business, I would definitely open a small scale resort for I have the
knowledge of the market. I know how each customer (market / country) behave and the market
pattern. Also this is a very profitable and potential industry with various opportunities.
But for an average person who is starting a new business, I would recommend to start a
restaurant, for it is also a profitable industry and you only need a significant amount of knowledge to
run it. by selecting a proper geographical location you will be able to succeed in the business and
move forward.

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Conclusion

A mission and vision are standard and critical elements of a company's organizational
strategy. Most established companies develop organizational mission statements and vision
statements, which serve as foundational guides in the establishment of company objectives. The
company then develops strategic and tactical plans for objectives.
As per the objectives of Island Leisure Lanka, they are not specific, measurable and timely
but they are achievable and realistic (SMART). They need to work on their objectives, they need to
specify how they are going to achieve their objectives, quantify them and provide time duration to
achieve them. This will act as a proper guide to the employees as well as the customers who will be
choosing their service.
After conducting an internal and external analysis of the company we were able to find its
positive and negative factor prevailing both inside and outside the company. Currently the company
possess a lot of weakness but using their strength they have the potential to overcome those
weaknesses and turn them into their strengths. Also there are many opportunities for them which
will increase their performance and competitive advantage; by grabbing into these opportunities
they can avoid the prevailing threats to the company.
Also through directional policy matrix and Ansoff matrix, we were able to pin point the
current position of the organization in the industry. As per the gathered day, they still have to
achieve more in order to reach their vision which is to become the leading inbound tour operator in
the country. In order to do this, they have to invest more into the company and bring in resources
which will improve their performance, such as; new IT technological structures. This will help
increase their efficiency whereas that will make them move towards their objectives.
When we consider the strategies they have undertaken in promoting their product portfolio,
they have currently undertaken market penetration, product development and market
development. The risk associated with market penetration and product development is low
comparatively to product development. It is advisable for them to learn more about the service they
are going to develop and implement it, this way the risk level will go down a little.
As for the business planning of Island leisure, they need to come up with more optimum
ways to achieve their plans so that they can reach the expected position. This is very crucial because
these levels show the performance of the business.

When you plan to start up a new business it is always best to come up with various ideas and
filter them by checking some criteria and selecting a more appropriate business. if we just start a
business when the idea came into or mind, the failure rate of that specific business is very high than
its success rate. So it is best to study the market and assess your knowledge before you do anything.

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Reference

 Island Leisure. 2013. Island Leisure Lanka. [ONLINE] Available at:

http://www.islandleisure.lk/. [Accessed 10 October 2013].

 Island Leisure Lanka, 2012. [DVD] Ujan, Sri Lanka: Island Leisure. [Accessed 10 October 2013]

 Mrs. Ruwini, (2012). Island Leisure Accounts. 1st ed. Island Leisure Company: [Accessed 15
October 2013]

 Sri Lanka Tourist Board (). Sri Lanka Tourism. [ONLINE] Available at:
http://www.srilanka.travel/index.php?route=common/home. [Last Accessed 10 October
2013].

 Weerasinghe, S. 2013. About Island Leisure Lanka. Interviewed by Sheran Dunlas [in person]
Island Leisure Company, 14th of October 2013.

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Appendix

APPENDIX

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1.1. Vision, Mission and values

1.1.1. Vision

An inspirational description of what an organization would like to achieve or accomplish in the mid-
term or long-term future. It is intended to serves as a clear guide for choosing current and future
courses of action.

1.1.2. Mission

A written declaration of an organization's core purpose and focus that normally remains unchanged
over time. Properly crafted mission statements serve as filters to separate what is important from
what is not, clearly state which markets will be served and how, and communicate a sense of
intended direction to the entire organization.

1.1.3. Values

Core values are what support the vision, shape the culture and reflect what the company values.
They are the essence of the company’s identity – the principles, beliefs or philosophy of values.

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1.2.1. Value Chain

This model has been introduced by Michael Porter. It proposes that an organisation achieves
competitive advantages when it acquires or develops skills and capabilities to outperform its
competitors. In other words, it is the ability of an organisation to stay ahead of its potential and
prevailing competitors and the competition.

Primary activities

1. Inbound logistics:
Inbound logistics refer to all the activities related to receive goods from the
suppliers, decision about the transportation scheduling, storing the goods as inventory,
managing the inventory, and make the inputs ready to use for the production of end
products.

2. Operations:
These include the production process, development activities, testing, packaging,
maintenance, and all other activities that transform the inputs into finished product.

3. Services:
Organization offers the services after the products and/or services have been sold.
These service activities enhance the product’s value.

4. Outbound Logistics:
The finished products are developed using the product related activities. Now
activities are required to transfer the finished products to the customers these are outbound
logistics.

5. Marketing and Sales:

The activities performed to make sure that the products are transferred to the
targeted customer groups and increasing the sales of the business

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Support activities

1. Procurement:
This is the purchasing activity of the inputs to transform these into finished products
or services.

2. Technology Management:
Technology can be used in production to reduce cost, to develop new products,
increase customer service facility, build up cost effective process, etc. It supports the value
chain activities such as research and development, process automation, process design, etc.

3. Human Resource Management:

The key roles of HR are to support the attainment of the overall strategic business
plan and the objectives. As a strategic business partner HR designs the work positions by
hiring, recognition, reward, appraisal systems, carrier planning, and employee development.

4. Infrastructure:
This includes the planning management, legal framework, financing, accounting,
public affairs, quality management, general management, etc. These are required to
perform the value added activities efficiently to drive the organization forward to meet the
strategic plan and the objectives.

Mapping of Porter’s value chain activities into business functional units | Management Innovation
eXchange. 2013. Mapping of Porter’s value chain activities into business functional units |
Management Innovation eXchange. [ONLINE] Available at:
http://www.managementexchange.com/hack/mapping-porter%E2%80%99s-value-chain-activities-
business-functional-units. [Accessed 26 October 2013].

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1.4. SWOT Analysis

SWOT analysis is used to find out the Strengths, Weaknesses, Threats and Opportunities of
the business, thus the word SWOT was derived from the first letter of each character. Strengths and
Weaknesses are the internal factors of the business while Threats and Opportunities are the external
factors of the business. By using the derived results of the analysis, we could improve the situation
of the business. You can reduce or overcome the negative attributes of the business by the support
of its positive attributes and improve the performance of the business.

Internal External
Positive

Strength Opportunity
Negative

Weakness Threat

Advantages of SWOT Analysis:

 It can be applied to many areas; it could be done for the industry, specific business,
departments, teams, individuals, projects and so on.
 It helps find out the pros and cons of the business both internally and externally.
 Simple and can be easily understood.
 Less cost for collecting data.

Disadvantages of SWOT Analysis:

 The factors cannot be ranked or quantified (we cannot measure the significance of each
factor).
 Each attributes only falls under one category (there are attributes which can be both
strength to the organization and also a weakness at the same time).
 Data is dependent on the person who collects the information, so he must have a proper
knowledge about what he is doing and what is he doing the SWOT analysis on.

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2.1.1. Directional Policy matrix

 Business Position
Factor Importance Weight Score
Market share 5 -3 -15
Quality of service 5 2 10
Pricing / price 4 -2 -8
Cost 3 -1 -3
Management skills 3 1 3
Efficiency 4 -3 -12
Resources 3 -4 -12
Total 27 -37

Maximum score = 27 x 5 = 135

Percentage = (-37/135) x 100 = -27%

 Business Sector Prospect

Factor Importance Weight Score
Market growth 5 4 20
Size of the Market 4 3 12
Technology 5 -1 -5
Industry Capacity 1 1 1
Competition 4 5 20
Pressure Groups 1 -4 -4
Government 3 2 6
Financial 2 -1 -2
Economy 4 -2 -8
Total 29 40

Maximum score = 27 x 5 = 145

Percentage = (40/145) x 100 = 28%

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2.2.1. Boston Matrix:

1. Question Mark

This quadrant is also known as “problem child’. It contains the organisation’s products that
have relatively low market share in high growth markets. These products require more investment
than the earnings, hence they are considered as cash users.

2. Star

Products with high market share in a high growth market are found in this quadrant. Since,
they have high growth, further investments are required. Cash generated by these products are used
by the same; hence they are called cash users. Economies of scale are possible advantage for star
products.

3. Cash Cows

These are the products that enjoy high market share in low growth markets. These products
are considered to be matured products; hence their required investments are very minimal. Excess
cash generated by these products can either be used to invest selectively on question marks or to
support stars or both.

4. Dog

Dogs refer to products with low market share in low growth markets. Low margin or loss
making products fall into this quadrant.

Kotler P. Keller K. Marketing Management. New Jersey: Pearson Education LTD; 2006

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