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Strategy Report of Crown Resorts Limited Assessment 3 Answer

Assessment 3 Outline

Assessment title: Assignment 3Assessment weighting: 50%
Assessment type: Strategic ReportWord limit: 3000 Equivalent
Assessment instruction
Strategic Report You have been hired as the Director of Strategy of a hospitality organisation (of your choosing). Your first task is to research, outline, critically analyse and evaluate the current business strategy and discuss how well the strategy has been implemented by using relevant theoretical (academic and industry) tools, concepts and frameworks covered in this subject. Imagine your strategic report will be presented to the Board of Directors of your chosen hospitality organisation.Your Strategic Report should:
  • Ensure your critical analysis at a minimum contains the following:
    • Organisations’ core competencies and strategic capabilities
    • Organisations’ dynamic capabilities
    • Organisations’ sustainable competitive advantage or the need to establish it
  • Make a recommendation to the Board of Directors on how the existing business strategy can be refined and improved to enhance the companies’ competitive positioning and improve competitive advantage (note: the recommendations form a key part of this assignment).
Assessment format
This is an individual assignment using the Report style format.
Title Page
Executive Summary
Table of Contents
Reference List
Specific line spacing
Specific margins
Min/max references
Graduate qualities being assessed:
GQ1 The acquisition of a systematic, coherent and in-depth body of knowledge relating to the hospitality industry, the underlying principles and concepts, and associated industry communication and professional skills.

GQ2 An appreciation of the social, cultural and environmental contexts of the hospitality industry, its operations and development and of the issues of significance to both the industry and wider community, including sustainability.
GQ4 The ability to research, evaluate & use information & ideas from a broad range of sources to effectively identify, formulate & solve problems, to generate ideas & demonstrate a capacity for initiative, judgement, innovation & entrepreneurial thinking.

GQ5 The ability to communicate effectively and appropriately in a range of hospitality industry contexts using communication, literacy, numeracy and information technology skills



Executive summary

This strategic report has concentrated on the strategy analyses of Crown resorts limited critically. In their business, Crown resorts follow a specific business strategy which is providing success to the company over the years. The company is possessed of many strengths factors which enable Crown resorts limited to sustain competitive advantage in the high competitiveness of the Australian market. Although, weak factors are equally present in the company which needs to be eliminated in order to achieve success in the market. That is why the detailed recommendation has been provided in this report for Crown resorts limited in the end. The recommendations are as follows:

  • To organize training and development programme to achieve a skilful workforce
  • To provide benefits to their employees to decrease the employee turnover rate
  • To developed strategy to sustain competitive advantage 

1. Introduction 

1.1 Purpose

This strategic report is generated to analyse and evaluate the business strategy of any hospitality organization of Australia. Tourism and hospitality industry follow particular strategies (Evans, 2020). Along with that, the strategies will be discussed for analyses of the appropriateness of their implementation by using relevant theories and frameworks. For this purpose, Crown resorts limited has been selected in this report. 

1.2 Limitation

The major limitation of this report is the collected information of the organization is indirect as information is not gathered by contacting the authorities personally. All the information on this report is taken from the online sources.

1.3 Scope

In the initial part, this report will discuss the business strategy of Crown resorts limited. The strategy will be analysed by the SWOT framework. Along with that, core competencies, dynamic capabilities and sustainable competitive advantage will be discussed. In the end, there will be few recommendations for Crown resorts limited to improve their business by their strategy.

1.4 Overview of Crown resorts limited

Crown resort limited in one of the largest gaming and entertainment business groups in Australia who has a large investment in the integrated resorts industry in the country (Crownresorts, 2020a). The resort of this group named Crown Melbourne is located in the Southbank of Victoria of Australia where the headquarter of Crown resorts limited is located. Besides Crown Melbourne the company operates another leading gaming and entertainment complex named 'Crown Perth'. Crown resort limited started its business operation in 2007 in Australia (Crownresorts, 2020a). In 2018, the market capitalisation of the company was around A$ 8.7 billion in Australia (Crownresorts, 2020a). 

1.5 Current business strategy of Crown resorts limited

The business strategy of Crown resorts limited focuses on the setting of list prices, credit terms, payment periods and offers. Therefore, the strategy of the organization is based on the price penetration in order to set the lower price than their competitors in Australia as it will enable them to achieve their business profitability goals.

2. SWOT analysis

SWOT Tool is actually a strategic planning framework which is used to define the strength, weakness, opportunities and threats of business of any organization (Tiwari & Srinivasan, 2020). That is why in this report the SWOT framework is used to identify internal and external business factors of Crown resorts limited.SWOT framework

Figure 1: SWOT framework

(Source: Developed by author)

2.1 Internal business environment analyses  

2.1.1 Strengths

There are many factors in the business of Crown resorts limited that has enabled the company to achieve huge success in the hospitality market of Australia. Major factors are discussed in the below:

  • Successful track records

The company has started its business operation in 2007 and as a new company within a few years, Crown resorts limited has generated huge sales in the market (Crownresorts, 2020a). In 2019, the normalised revenue of the company was $3.129 million (Crownresorts, 2020b). Apart from this in 2018, the market capitalisation of the company was about A$8.7 billion (Crownresorts, 2020c). Crown resorts limited has successfully led their business from its opening year and now it is one of the largest leading resort companies in Australia.

  • High level of customer satisfaction

Crown resorts limited is highly dedicated to their customer service, that is why the customers of the company are highly satisfied with their service. The company has approximately 18,500 skilful employees who maintain their business operations by keeping in mind to provide satisfying customer service (Crownresorts, 2020a). For this purpose, Crown resorts limited has generated an efficient customer relationship management team who maintains this area of their business.

  • Strong marketing

Strong marketing strategy is one of the strengths of the business of Organization (Morgan et al., 2019). In order to aware their business and to gather customers, the company has a broad presence in social media platforms such as Instagram, Twitter and Facebook (Crownresorts, 2020a). In these three platforms, the company has more than millions of followers, therefore, Crown resorts promote their business on these platforms by providing images of their hotels, properties, offering discounts and in other ways. Apart from this, the company has its website where customers can find any information regarding their business and service. Therefore, it can be said that Crown has used technology highly in their business which is a strong factor of the company.

2.1.2 Weakness

Apart from the strength factors, there are few weak factors too that exist in the business of Crown resorts limited. They are discussed in the below:

  • Rented property

One of the major weaknesses of Crown resorts limited is the property of the company rented as it is not purchased, therefore, due to this reason, Crown resorts limited has to pay a huge amount for rest purposes. This amount increases the costs and wages of the company and equally, it affects the turnover rate of the company. If the property purchased, then, it will be possible for the company to avoid these irrelevant wages.

  • Research and development

It has been observed that Crown resorts limited invest very little in the research and development area which is one of the significant parts of the business. The investment is very less than comparing its competitors in Australia. For this reason, there is a lack of innovativeness in their products and services which is a major weakness in their business. In order to stay in the competitiveness of the market, it is necessary to have innovativeness in business for any organization.

  • High employee turnover rate

The marketers of the company have depicted that high employee turnover rate is a challenge for Crown resorts limited and the rate is very high compared with its competitors (Crownresorts, 2020a). The major reason for this high turnover rate is the lack of diversification in the workplace of Crown resorts limited. The company has majorly focused on the Local workers, therefore other employees of the company cannot adjust to the workplace. In the consequences, employees give up from their job and the spending on their training and development increases the wages of the company.

2.2 External business environment analysis

2.2.1 Opportunities 

Crown resorts limited has many business opportunities that the company can utilize tactfully to increase its profitability in the hospitality industry of Australia. Among them, major opportunities are discussed in the below:

  • New taxation policy

New taxation policy of the Australian government can improve the business operation and the profitability of Crown resorts limited in the hospitality industry. The reduction of the tax rate by 27.5% can provide the ultimate benefit to the business of Crown resort limited. In this way, the company has to provide a very less amount in the tax. Besides this, the government has announced a subsidy in the selling of environmentally friendly products in the hospitality industry (Australian taxation office, 2020). That is why there is an opportunity for Crown resorts limited to launch environmental goods and to achieve the subsidy. 

  • New customers through online platforms

In modern business, the perceptions of the customers are changing continuously and it has affected the hospitality industry as well. Technology has impacted the hospitality industry in recent days and as a result, the number of digital customers is increasing day by day. In 2019, there were about 27.74 million internet users in Australia who are equally active on social media platforms (ROI, 2020). As Crown resorts limited has a broad social media platform, therefore, they have the opportunity to generate new customers from their online channels.   

  • Low inflation rate

The low inflation rate of Australia provides the opportunity to Crown resorts limited to increase their profit percentage. In 2020, the inflation rate of Australia is 1.43 % which is also less than in 2018, when the inflation rate was 1.63% (Statista, 2020). Due to the continuous decrease in the inflation rate, the cost of the raw materials for hospitality business is low in Australia which provides an opportunity to increase the profit percentage of Crown resorts.

2.2.2 Threats

Threats are evenly present in the business of Crown resorts limited. Few of them are discussed below:

  • Shortage of skilled workforce

The global hospitality industry is facing many issues, among them, the shortage of a skilled workforce is one of the burning issues (Huo, 2018). Australian hospitality is suffering also due to this reason which is also a threat for Crown resorts limited. A skilled workforce is one of the primary conditions to achieve success in the business of Hospitality industry (Tesone, 2012). Therefore, this issue can decrease the profitability of Crown resorts limited as in this way, the company may not be able to mitigate the customer's satisfaction.

  • Currency fluctuation

Crown resorts limited operated their business in international locations such as London and others apart from Australia. Therefore, the currency fluctuations of the countries are a threat to the international business of the company. The company has many international projects in their pipeline but currency fluctuation provides a volatile political climate in the different markets of the world. That is why this is one of the major threats in the business of Crown resorts limited.

  • Intense competition

The Australian hospitality industry is highly competitive. Many big hotel and resort organizations exist in the market in Australia. Some of the biggest entertainment hospitality organizations of Australia areTsogo sun holdings, Skycity entertainment group limited, Galaxy entertainment group limited, Station casinos Inc. and others (ZoomInfo, 2020). That is the reason competitiveness is a threat to Crown resorts limited. It has been observed that there is stable profitability in all the leading hospitality organizations in Australia. This is because Crown resorts limited cannot increase their prices which is a threat to their business development.  

3. Core competencies and Strategic capabilities of Crown resorts limited

According to Sturm et al., (2020), core competency is a theory of management that prescribes the strategies that need to be taken by the firms or the organizations in order to achieve competitive advantage in the market. Along with that, core competency depicts that business organizations need to play with their strengths tactfully or need to provide concentration on those areas where their competency level is high. Therefore, as per this theory, Crown resorts limited also needs to concentrate on their strengths to gain competitive advantage. In strategic management, core competency is one of the necessary things to consider (Hubbard et al., 2019). Therefore, the core competencies of crown resort limited are provided below in details:

  • Strong distribution network:

The strong distribution network is considered as one of the core competencies of Crown resorts limited. From the starting year of their business, the company has generated its outlets in every state of Australian which leads the company into a potential market.

  • Cost structure

Crown resorts limited follows a specific low-cost structure in their business which helps the company to produce low-cost product and service and to sell it to the customer at minimum price. This cost structure enables the company to achieve a competitive advantage.

  • Dealer community

Crown resort limited has produced a culture with their distributors and dealers where they promote the products and services of the company as well. Crown resorts invest in the training of their distributors, so they can explain to the customers better about the products. 

  • Product portfolio 

Crown resorts limited is possessed of an attractive product portfolio as the company offers its products to the customers by a number of categories. This large range of product categories grabs the attention of the customers more easily than the other competitors of Crown resorts limited.

Apart from them, there are many more strengths of Crown resort limited which is their core competencies and strategic capability that helps the company to sustain its competitive advantage in the market.

4. Dynamic capabilities of Crown resorts limited

According to Chowdhury & Quaddus, (2017), Dynamic capability is an organizational theory which defines the ability of an organization to integrate and reconfigure among the internal and external competencies in order to be compatible with the changing business environment. Dynamic capability theory uses resources of the organizations to be defined. Therefore, in the context of this theory, it can be stated that the Strengths and the resources of Crown resorts limited are the major Dynamic capabilities of the company. The strengths and resources have enabled the company to be compatible with the changes in the business environment.

By using its resource, the company has built its expertise and achieved success immediately by entering into the new market. However, business expansion has helped the company to generate a new revenue stream by eliminating its risk factors. In this case, the innovative team of the company has invented new ideas to use its resources and to achieve success in a new market. That is why the innovative team of Crown resorts limited is another resource who has helped them highly to be successful in the new market.

Competition exists in the business industry; therefore, organizations need to develop their strategy accordingly (Hitt et al., 2017). The company has adopted several changes such as the implementation of technology, competitive price, improvement of the quality of their service and products to be compatible with the current needs of the Australian hospitality industry. In order to generate a high customer base, Crown resorts limited promote their business in the digital medium as most of the customers prefer this medium to choose their service or products. Apart from this, as the Australian hospitality industry is highly competitive, the company operates its business at competitive prices. In order to be compatible with the changing needs of the customers, Crown resorts limited has continuously improved its services and products.

5. The sustainable competitive advantage of Crown resorts limited

Michael Porter competitive advantage model has stated regarding sustainable competitive advantage that it is set of the competitive strategies of an organization that provides long term competitive advantage by developing the strategies (Öz, 2019). Every business organization needs to generate their business strategy in order to gain an advantage in the competitiveness of the market. It has been already mentioned that competitiveness in the hospitality industry of Australia is very high as many organizations exist in the country. As Crown resorts limited is a gaming and entertainment resort company, their major competitors are Tsogo sun holdings, Skycity entertainment group limited, Galaxy entertainment group limited, Station casinos Inc. and others (ZoomInfo, 2020). All these companies provide the same services to the customers and their stability of the profit is very close to Crown resorts limited. However, although there is a high competitor in the market, still it can be said that Crown resorts limited has a chance to sustain their competitive advantage by utilising its strengths and strategic capabilities. For this purpose, Crown resorts limited has to utilize its strengths tactfully by analysing the activities of its competitors.

Although in the market there are many gaming complexes in Australia, Crown resorts limited has established their business within their starting year. Therefore, it can be said that the company has applied a specific business strategy in this case, so, the implementation of the strategy of Crown resorts limited is appropriate. Besides this, Crown resorts limited provides their products and services at very minimum, which is helpful to sustain their competitive advantage. Apart from this, the continuous successful track record of the company depicts the competitive advantage of Crown resorts limited and attracts the customers as well. The primary business objective of Crown resorts limited is to provide high-level satisfaction to their customers regarding their service which sustains the competitive advantage of the company highly. Hence it is vividly clear that the sustainable competitive advantage has been established in Crown resorts limited.

6. Recommendation

On the basis of the overall discussion, it has been found that the business strategy of Crown resorts limited is appropriate as it enables the company to achieve success in the market of Australia over the years. Although there are few gaps and issues in the business of Crown resorts limited too that restricts the growth of the company. That is why in the below, few recommendations are provided in order to eliminate those issues to sustain their business profitability.

  • Skilful workforce

Lack of the skilled workforce is one of the major issues of Crown resorts limited which limits the level of the customer satisfaction of the company. That is why it is recommended to the company to organize training and development programmes to generate a skilful workforce. In this way, the company can provide satisfactory service to its customers.

  • Providing benefits to the employees

Among the hospitality organizations of Australia, it has been noticed that the employee turnover rate is maximum in Crown resorts limited which increases the cost of the company. For this reason, the company needs to regenerate their HRM department who will analyse the issues of the employees and provide them benefits in order to resolve these issues of the employees. In this way, the company can retain its employees and improve their profitability.

  • Competitive strategy

As the competition is very high in the Australian market, therefore, it is suggested to the company to take the competitors seriously. Crown resorts limited need to generate the competitor's analysis to identify their main competitors and their activities. strategy analysis helps the companies to understand the market and their competitive strategy in order to gain an advantage in the market (Hubbard, 2015).

7. Conclusion

This report has been generated to analyse the business strategy of Crown resorts limited critically. Crown resorts follow a particular business strategy in its operation which has helped the company to achieve huge success in a very short time in the market. There are many strength factors that have helped the company to gain success such as strong marketing, high level of customer satisfaction, attractive product portfolio, Strong distribution network and so on. These factors not only help the company to achieve success but also help to sustain their competitive advantage in the market. However, apart from them, there are few weaknesses in the business operation of Crown resorts limited which restricts the development of the company such as lack of skilful employees, high employee turnover rate due to improper strategy, ineffective human resource department and many more. For this reason, this report has provided few recommendations for Crown resorts limited to eliminate these issues from their business and lead the company towards ultimate success.

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