January 10th, 2018
The Club’s Service Marketing Strategy – external Situational Analysis
An analysis of the macro environment factors affecting the Club’s operations and the industry competitiveness offers a basis for identifying the opportunities and threats the external environment poses to the Club.
Macro environment factors (Political, Economic, sociocultural and technological; PEST) affect the Club’s business to a varying extent. Political aspects such as the legislation that restrict foreign ownership of land (PRS group Inc. 2010, p. 1; Denton Wilde Sapte 2001, p.13), restricts the capability of the Club to relocate some of its facilities to a more accessible location. Change in leadership also could present a challenge to the future prospects for the Club, but the stability in the UAE, lacking political, ethnic and religious conflicts characteristic in the neighbouring countries (PRS Group Inc. 2010, p. 21), gives the Club a sense of security for long-term planning. Other favourable political aspects are government effectiveness, regulatory control, regard for rule of law and control of corruption (Department of Marketing n.d., p. 11). In respect to the economic environment, the favourable economic status of Abu Dhabi offers the club an opportunity to expand its membership as more expatriates relocate to conduct business in Abu Dhabi. Currently, Abu Dhabi enjoys better economic climate than the rest of the neighbouring regions in terms of per capita income, business climate, creditworthiness and growth potential (Department of Marketing n.d., p. 10 – 11).
Although the sociocultural environment in Abu Dhabi differs from that of many expatriates’ home countries (e.g. Britain), the focus on expatriates as the Club’s customers reduces the effect of Cultural differences on the Club’s operations. However, differences in members’ cultural backgrounds (e.g. Britain vs. India) could still influence the Club’s operations. In respect to technology, Abu Dhabi provides a favourable environment due to its connectivity to the world ensured by its airport and media technologies (Abu Dhabi Council for Economic Development 2009), which would for instance help the Club to market its services to potential guests in overseas locations. However, aspects such as lower training and technology in the medical field prevents the Emirate from attracting additional tourists (medical tourists), who could serve as potential guests for the Club (Abu Dhabi Council for Economic Development 2009).
The analysis of the Club’s macro environment indicates a favourable position mainly driven by excellent economic conditions and a relatively stable political environment. Sociocultural aspects have a minimal effect due to the Club’s focus on expatriates with the continuing adoption of modern technologies presenting an opportunity for the Club to reach a more expanded customer base. However, the Political environment also presents challenges relating to land ownership that limits the extent to which the club can relocate to a favourable location to enhance its accessibility
Porter’s five forces, which evaluate the effect of the buyers’ bargaining power, new entrants, suppliers’ bargaining power, substitutes and competitive rivalry on an entity’s operations (Porter 2008), can help in evaluating the Club’s competitive landscape. The bargaining power of the Club’s members is high. Being a private members’ club the preferences of the members influence the Club’s operation, as evident from the resistance to technology that has led to a predominantly manual data processing environment (Department of Marketing n.d., p. 11). Members bargaining power is also enhanced by existence of alternatives and the low switching costs among alternatives due to similarity of services offered by competitors.
The bargaining power of suppliers is low since the Club has multiple alternatives to source aspects such as labour and products (e.g. food and drinks) offered in the process of service delivery. The threat of new entrants is low, due to barriers presented by aspects such as restrictions in land ownership (PRS group Inc. 2010, p. 1; Denton Wilde Sapte 2001, p.13) and presence of established brands in the market (Department of Marketing n.d, p. 7). Availability of multiple competitors offering similar services makes the competitive rivalry in the industry high (Department of Marketing n.d, pp. 6 – 7). The Club must thus augment the differences in its services to avoid losing its members to the competitors (Porter 2008). Such augmentation could be brought out by highlighting the uniqueness of the Club in allowing participation of members in decision-making practices through the annually elected executive committee.
The analysis of the external environment highlights various opportunities and threats. Among the opportunities is the possibility of expanding its membership and revenue by leveraging the advantages provided by the emirates to advertise its services to expatriates moving to the UAE and/or tourists. Another opportunity is engaging in strategic alliances to help it host large acts thus benefit from ticket sales (Department of Marketing n.d., p. 10). Nevertheless, the Club faces threats from aspects such as restrictions to land ownership and increasing competitiveness in the leisure industry in Abu Dhabi.
Go to part four here.