Strategic Analysis for a Tourist Spot

Question: Discuss about the Strategic Analysis for a Tourist Spot. Answer: Introduction: Tourism is an industry that is privileged industry which enjoys a profitable business all year round. There are many tourist destinations in the world, which are immensely popular to the tourists some for their historical value, and some for their scenic beauty. The Taj Mahal in India is one of the Seven Wonders of the World that attracts many tourists from all over the year. The Taj Mahal was built during the year 1632 and 1648. This report discusses the strategic analysis of such a tourist destination, Taj Mahal. Made entirely of marble, the mausoleum was built by the mughal emperor, Shah Jehan for his deceased wife Mumtaz Mahal in her fond memory (Tajmahal.gov.in, 2017). It is one of the Seven Wonders of the World, which is enormously popular with the tourists from all over the world. The report presents the external analysis as well as the internal analysis of the Taj Mahal as a tourist destination. The write up also discusses the strategic options of the tourist destination mov ing on to the recommended strategy to attract the attention of the tourists worldwide. External Analysis: PEST analysis: The PEST analysis is a tool that is helpful in measuring the political, economic, social and technological factor that might affect the future of the business of a company. However, in this case, the Taj Mahal is not a company, still it has a brand value to the entire world. Political factor: India, as a country attracts many tourist from all over the world owing to her rich and vibrant culture, heritage and beauty. There are many interesting and marvelous tourist destinations in the country, the most renowned of which is the Taj Mahal situated in Agra, Uttar Pradesh, a state near the capital state of Delhi. The political scenario of the country to a large extent impacts the tourist footfall in this tourist destination. The political scenario of the country goes through many ups and downs which sometimes dwindles the influx of tourists. During particular periods of political importance like elections or any political emergency, the inflow of tourists becomes reduced automatically. The political scenario of India often affects the tourism to the different corners of the country. It is thus very much related to the growth of the tourism industry in the country as a whole. Economic factor: The economy of a country, especially like India, is greatly dependent of its tourism industry. The tourism industry in foreign exchange is worth Rs. 21,828 crore. The economic factor of the country or the state affects the tourism trend of a particular destination to a large extent. The Gross Domestic Product (GDP) plays an important role in encouraging tourism in the country. If the economy of a country is on the brighter side, then it can invest in more ways to attract the tourists. The state of Uttar Pradesh, as well as the ministry of the country and the tourism ministry takes a lot of actions in order to encourage tourists to come to the Taj Mahal. The methods include beautification of nearby places, creating advertisements to attract the tourists, promoting the concept amongst the locals to treat the tourists with supreme respect and love, etc. through various promotional campaigns, etc. On the other hand, the economic wellbeing of a country is also depended on the tourists (Homan and Mercer 2014). The economic downturn for the country, especially the decline of rupee in the recent times has been acting as a weakness. Social factor: The social factor of a country too affects the tourism of the country hugely. The social factors contribute to the characteristics of a particular country. India, as a country, has a unique mix of culture and society. Its uniqueness lies in its diversity. The Taj Mahal is one such destination that embodies the sentiment of love and emotion that appeals to everyone irrespective of boundaries. The social factor that is implied through this magnificent monument, attracts tourists from all over the world to this beautiful piece of architecture (Vishal et al., 2016). Porters five forces: The analysis of Porters 5 forces is essential to analyze and interpret the level of competition inside an industry and the development of the business strategy to formulate a plan to overcome the challenges and to harp on the opportunities and move towards the desired growth. The Porters five forces consist of five elements namely, bargaining power of suppliers, threat of substitutes, threat of new entrants, industry rivalry and bargaining power of buyers. The Taj Mahal as a tourist destination too, has all these elements which needs to be considered for a thorough analysis of the future strategy of the destination (Singh and Sharma 2012). Bargaining power of suppliers: The bargaining power of suppliers is important in analyzing the chances of the suppliers driving up the prices of the product. In this case, since the Taj Mahal is not a consumable product in the literal sense, the bargaining power of the suppliers should be measured by gauging the power that the local government, the hotel and resorts around the destination and the local tour guides (Chareyron, Da-Rugna and Raimbault 2014). The bargaining power of suppliers is low for this tourist spot. Threat of substitutes: Being one of the Seven Wonders of the World, the Taj Mahal does not have any major threat of substitutes. However, there are many other tourist destinations around the place which might be considered as substitutes. The threat of substitutes in this case is moderate. The other tourist spots in and around Agra and its neighboring states act as the threat of substitutes for the Taj Mahal (Kulshreshtha and Akojiam 2015) Threat of new entrants: The Taj Mahal, as a tourist destination, surely does not have any threat of new entrants in the market as it has its own charm and appeal. However, with the advent of new trend and new preferences, there remains a risk of a shift in the preference of the tourists, discovering the reality and the actuality of a particular country and not only the magnificent and grand structures of that place. The threat of new entrants in this respect is very low as nothing can compare with the magnificence of the Taj Mahal. Industry rivalry: The industry rivalry essentially indicates and implicates the competitive rivals of a particular company. However, in this case, there are no industry rivalry when it comes to Taj Mahal as it is an immensely popular to the tourists all over the world. The competitive rivalry is moderate. Since it is one of the Seven Wonders of the World, it does not have any strong rival in the market. However, the competitive rivals of the Taj Mahal are the tourist spots in the neighboring states of Delhi and Rajasthan. The tourist spots at Delhi are Red Fort, the forts and historical places at Rajasthan, etc. The competitive rivalry is moderate because of the importance that Taj Mahal gets as a tourist spot, that no other tourist spot can compare (Kaur 2016). Bargaining power of buyers: The bargaining power of the buyers in this case, varies greatly on the capacity of the suppliers to attract more buyers, in this case, tourist to the tourist destination. Nowadays, the tourists (buyers) are well-informed about anything that they plan to spend a certain amount upon (Tisdell 2013). Therefore, the bargaining power of buyers in this case is high. From the analysis of Porters five forces for the Taj Mahal, it can be observed that the industry for tourism for the Taj Mahal is overall very attractive. Internal Analysis:Tangible and Intangible resources One of the tools to assess the future trend in the success and prosperity of Taj Mahal as a tourist spot is the analysis of the monument based on tangible and intangible resources. Tangible resources: Tangible resources are those resources that are physical in nature. The tangible resources are buildings, land, machinery, capital and equipments. These resources are divided into four parts: Physical resources, financial resources, technological assets and organizational resources. The physical resources of the Taj Mahal is extremely important in this case as it, being a tourist spot, has a strong physical presence. The grandeur and the beauty of the monument exemplify the strong physical resource. It is a strength because the physical resource of Taj Mahal is the strongest point that exists for the monument as a tourist spot (Schriber and Lwstedt 2015). Intangible resources: The intangible resources are those resources that have no physical presence but still can be owned by the company. Intellectual properties such as trademarks, licenses and patents, all fall under the category of intangible resources. The intangible resources are divided into four categories, namely, human assets and intellectual capital, relationships, brand, image and reputational assets and company culture (Dumitrescu 2012). The brand image of the monument is quite high. The brand image for the Taj Mahal is something which works in favor of it. However, the trademark or buyer loyalty for the monument is something which is lacking. This is something which almost has an iconic value which many brands and company use to represent their products. Thus, it can be said that the Taj Mahal has a weakness in the form of the intangible resource of buyer loyalty. SWOT analysis: Strengths Weaknesses The Taj Mahal as a tourist destination undoubtedly enjoys a lot of power to attract the attention of the tourists. It is a world-renowned tourist destination. The essence of love and memory reflected through this monument appeals to all irrespective of borders. The Taj Mahal is one of the Seven Wonders of the World, which means it is immensely popular with the tourists. The Taj Mahal is situated in the state of U.P. in India, which is politically very volatile. The security of the tourists remains a very big concern to the tourists. The lack of cleanliness and the tidiness also is a matter great worry for the tourism of the Taj Mahal. Other factors like corruption, begging, theft and cheating is a one of the weaknesses. Opportunities Threats The Taj Mahal has many scopes like it can be a backdrop for many wedding tours, which can be romantic to the new couple. It enjoys a rise in the tourist footfall due to the awareness of many with the help of internet through online campaigns (E. Dobbs 2014). Many cultural programs can be conducted in the backdrop of the magnificent monument, which might attract the attention, and interest of the tourists (Eaton 2012). The frequent political unrest in the country as well as in the state remains a major threat for the Taj Mahal (Mishra 2013). The frequent depreciation of rupee, the Indian currency, is also a factor that acts as a threat to the tourism to the Taj Mahal. The threat of terrorism and terror attacks to monuments of historical value like the Taj Mahal, often deters the tourists from visiting the destination or the tourist spot. (Source: created by author) One key issue that the monument faces as a popular tourist spot in the heart of India is the presence of corruption and security threats to the tourists that come to visit the monument. Strategic Options: Tourism to the Taj Mahal is something that is evergreen and is popular with almost everyone. However, there are some factors, which contribute to the low tourism percentage at certain points of time. The depreciation of rupee and the worldwide economic turndown all contribute to a lesser amount of tourism to the Taj Mahal. One of the main strategic options available that can be implemented to increase the tourism to the monument is a best cost-provider strategy (Gamble, Peteraf and Thompson, 2017). This strategy involves giving the customers the best or more value for money by emphasizing the quality and attributes of the product and beating the expectation of the customers by providing a quality product at a low cost (Alstete 2014). The strategy emphasizes the companies to attract value conscious customers looking for a good quality product at an economical price. The management division at the Taj Mahal can consider this strategy in order to combat the effects of the economic downturn that has gripped the world (McCann and McCarren 2012). Another strategy that can be considered is the focused low cost strategy. The focused low cost strategy. This strategy is based on the idea of keeping the costs of the product low. It concentrates on a narrow segment of customers. It offers the niche customers a product customized to their needs. The strategy if implemented to the monument can attract a lot of customers (Hiriyappa 2013). The economic downturn that has affected the world has created a huge impact on the spending ability of the customers. Thus, if a focused low cost strategy is applied, then many tourists can afford to visit the historical monument. Recommended Strategy: The best strategy for the Taj Mahal at this point of time is the best cost provider strategy. The historical monument appeals to all for its sheer grandeur and the sentiment behind erecting it. However, due to the fall in the economic condition across the world, the spending ability of individuals all across the world is significantly reduced. By implementing the best cost provider strategy, the tourists from all over the world can afford to visit the historical monument. The best cost provider strategy is a strategy that can prove to be the best alternative to the problem that is being faced by the world today (Cohen and Cohen 2012). Conclusion: The tourism industry is one industry in which there is a scope for growth and development irrespective of the economic downfall that exists in the world. The industry might be influenced by certain factors like the political scenario of the country or the world, however, it remains unfazed by any other external factor that may influence other industries of the world (Morrison 2013). The Taj Mahal is a grand mausoleum made by Shah Jehan in the fond memory of his wife, Mumtaz Mahal in the year 1648. Situated in Agra, U.P., India, it is one of the most well known places of tourist interest. In order to ensure a promising future for the tourism of the Taj Mahal, the above mentioned strategies have to be implemented which can only guarantee that the interest of the tourists will not wean anytime soon from the historical monument. References: Alstete, J.W., 2014. Strategy choices of potential entrepreneurs.Journal of Education for Business,89(2), pp.77-83. Cohen, E. and Cohen, S.A., 2012. Current sociological theories and issues in tourism.Annals of Tourism Research,39(4), pp.2177-2202. Dumitrescu, A.S., 2012. 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