Executive Summary
Dubai’s meteoric rise in the Gulf region is well known all over the world. The construction of state-of-the art hotels and skyscrapers fill headlines and business magazines from every corner of the globe. A company called Dubai World Trade Centre was able to capitalize on the early success of Dubai and in fact as early as 1979 began to make a bold move towards providing high-quality venues and facilities for businessmen and visitors. Their gamble paid off when Dubai became one of the most important financial centres in the world and when foreign investments came pouring into the area.
Due to the presence of hotels, leisure facilities, numerous business establishments and of course gigantic exhibition halls there is now a need for a more cost-efficient housekeeping industry. Many businesses in the Dubai and the Gulf region are willing to outsource. But since DWTC has relatively cornered the market when it comes to venue and events management it is just logical to improve their own Housekeeping department and maintain their workers in-house. Later on this can be expanded to serve the needs of the overall hospitality industry in Dubai.
Introduction
The news reports and various international publications are incessant in their praise of Dubai (Carter & Dunston, 2006). They are saying that it is not only one of the fastest growing cities in the world but if the trend continues then it can easily become the next Singapore (Whitelaw, 2008). Dubai is trying to prepare for a new era, one that does not involve the exportation of oil (Cooper, 2008). Thus, one of the most important features of the economic boom is real estate (Ghani & Lockhart, 2008). For instance, there is the world famous Burj Al Arab hotel, a sail shaped structure that symbolises not only the meteoric rise of Dubai but also its audacity to achieve what others had never done before.
As a result Dubai can boast of the following, “…the world’s tallest building (due to open in 2009), the world’s tallest all-suite hotel, the world’s largest man-made islands, and the first indoor ski slope in the desert … a shopping mall billed as one of the world’s largest…” (Whitelaw, 2008). There is also the world-famous Palm Jumeirah, Dubai’s man-made island shaped like a giant palm tree (Whitelaw, 2008). These developments allowed Dubai to attract visitors and investors which in turn propel the real estate industry as well as the banking sector to move forward. In fact, Dubai became a major financial global financial centre and again this has contributed much to its rapid economic growth.
The transformation of the city has been felt far and wide and due to the level of economic prosperity it was able to generate, Dubai has become a transport hub for sea and air transporters. This in turn added fuel to the fire and the radical improvement of the city continues while pulling in more investors. As a result there is a need for a facility that will cater to the needs of businessmen and realtors especially when it comes to meetings, conferences, conventions and exhibitions.
As a result a company called Dubai World Trade Centre (“DWTC”) was established in 1979 to cater to these types of business needs. The first company property was the 37-story office along Sheikh Zayed Road but since then it has expanded to include the Dubai International Convention and Exhibition Centre (“DICEC”), the Convention Tower office building, Novotel, and the Dubai International Hotel Apartments (DCWT, 200). Aside from that, the DCWT also manages the Dubai Airport Expo Centre. There is more to come because the Dubai Exhibition Centre (“DBX”) is currently under construction and when it is finished it will become the venue of the future because it will have an Event Arena and a Convention Centre with an exhibition space spanning a total of 300, 000 square metres (DCWT, 2009).
In order to sustain its impressive run the corporate leaders of DCWT must continually strive to provide quality service in the area of venue management, event management, hospitality and event services. For instance, event planners must be experts in their field. The Food & Beverage Department must also provide excellent service when it comes to cocktail reception, press conferences, gala dinners etc. (DWCT, 2009). But for this study the focus is on improving the Housekeeping department especially those that relate to cleaning services.
Research Methodology
There is a need to look at DWCT and how it has positioned itself to profit from the ongoing economic boom in Dubai. This means that the proponent of the study will have to find out how the company leveraged its resources so that there is no other place to go when it comes to event management, event services, venue management and services related to the hospitality industry. Then the bulk of the research will focus on how the Housekeeping department can be improved so that it can be enhanced as a revenue stream and therefore increasing the profitability of the company.
With regards to improving the Housekeeping Department, the proponent of this study must first understand principles of strategy and strategic management especially those concepts that will help in understanding the competitiveness of the industry and what can be done to improve the chances of success. This is achieved by conducting an external and internal analysis. Then the discussion will move to the description of various tools of analysis as well as its relevance to improving the Housekeeping Department.
The external analysis will be performed to understand the competitive forces that are at work outside the company. The internal analysis on the other hand is an examination of resources and other factors that are at work within the company. This means that when it comes to the forces working outside the company there is very little that the DWTC can do except to make the necessary adjustments. But when it comes to the internal forces such as resources that are available to the company, these things must be manipulated to provide competitive advantage for DWTC.
External Analysis
One of the most popular tools available in the market when it comes to external analysis is the Porter’s 5 Forces Analysis. It allows the analyst to study the competitive forces that influence the captains of industry (Stahl & Grigsby, 1997). Porter’s Five Forces are listed as follows (Stahl & Grigsby, 1997):
- potential entrants with their threat of entry – are there any competitors in the market who will be willing to make the necessary investment to challenge DWTC;
- buyers with their bargaining power – the extent at which customers can demand to lower the prices of products and services offered by DWTC;
- suppliers with their bargaining power – the extent at which suppliers can demand a particular price for their products and services;
- substitutes with the threat of substitute products or services – the probability that a substitute can be made available in the market and threaten the position of DWTC; and
- industry competitor with their rivalry among existing firms.
Aside from Porter’s 5 Forces Analysis a strategy can be developed using the BCG Matrix. This analysis tool is a portfolio planning model developed by Bruce Henderson of the Boston Consulting Group, hence the name BCG Matrix (Stern & Stalk, 2009). Henderson argued that a company’s business unit can be simplified into four categories based on market growth and market share relative to the largest competitor (NetMBA, 2007). For the sake of simplicity and clarity Henderson used easy to grasp and easy to remember terms such as dog, question mark, star, and cash cow.
A business unit that is labelled as a “dog” is a BU that has low market share and low growth rate. A question mark on the other hand is a label given to a BU that is growing at an impressive rate and yet requiring massive amounts of capitalisation in order for it to become a star. This is because while it a “question mark” business unit looks promising but as of the moment is not increasing the profitability of a company. A star on the other hand is a BU that can generate a lot of sales but at the same time this is cancelled out by the amount of money needed to sustain it. The best label is the “cash cow” because this BU is producing products and services that are already a hit in the marketplace and therefore there is little marketing or investment needed to promote it. Thus, it is more profitable to maintain cash cows.
The third external analysis tool that can be used in this study is the Critical Success Factors (Gospe, 2009). According to Morrison this business analysis tool will examine the following factors: a) the industry; b) competitive strategy and industry position; c) environmental factors; d) temporal factors; and e) managerial position (2009). These three external analysis tools will provide the proponent of the study enough information to decide if it is practical to invest in this industry and if it is prudent to introduce a new product or service.
Internal Analysis
Now the analysis must focus on the internal aspects of the company. One effective way of assessing company’s strength is through the use of the 7-S framework (McKinsey, 2009):
- Shared Values – this is the core values or the belief system of the company and is very important because it will be used as a basis for future decisions.
- Strategy – every company has a strategy and by examining it one can predict where it is headed.
- Structure – the way that an organisation was set-up and pertains to management.
- Systems – combining the aforementioned three components of the 7S framework will result in the creation of an appropriate system.
- Staff – the system, strategy, and structure will determine the number and skill-set of the employees that will be hired by the company.
- Style – this can be management styles or the culture that is predominant within the company (Mindtools, 2009).
- Skills – this is the overall capability of the company as seen from the point of view of the customer.
Generation of Options
In the previous section the company needed to find out if it can compete in the current Housekeeping industry. This time around the various tools that are available for options generation will help the proponent of the study to decide with regards to products or services that can be developed or improved in order to strengthen its competitive advantage in the marketplace. The tools that can be used for this exercise is TOWS Matrix, Ansoff Matrix, and Stake Holder’s Analysis. These three must be utilised to find out if it would make sense to pour more money into the Housekeeping business to increase customer satisfaction.
The TOWS matrix is simply a framework which can zero in on the internal resources (Purdue University, 2009). At one glance the researcher can see the resources available to it and the problems that needed to be resolved very quickly. Based on the inherent capability of the company the researcher will be able to understand the opportunities that are available for the group as well as the threats that can undermine it. The TOWS matrix is not limited to the forces that are at work within the company as it is also concern with external forces that can influence the organisation.
Stakeholders Analysis is different because it focuses not on the resources per se but the people, groups of people, organisations, and institutions that can play a major role in shaping the company (Unicef, 2009). There are key personnel within the company that can make or break a plan to improve the department. They can be the employees or the executives who can contribute much to the improvement of the services provided or has the authority to say no to certain acquisitions or release of funds. Moreover, it must be pointed out that one of the most important stakeholders is the investors who can ultimately support or shutdown a project.
The Ansoff Matrix is a tool to understand the kind of products and services that the firm is trying to sell (QuickMBA, 2007). But it is not only about products, it is also about the other factors related to marketing and sales such as: a) market penetration; b) market development; c) product development; and d) diversification (Marketing Teacher, 2009). Market penetration is important because it will provide data on existing products and existing customers, as well as how the company was able to saturate a particular market. Market development is also important because even if the product remains the same there is an forward motion when it comes to marketing it to a new audience. Product development on the other hand is the reverse of market development because here the company seeks to innovate and improve the existing product. Diversification is the last component of this framework and it is the creation of a completely new product to new customers (Market Teacher, 2009).
Organisational Background
The DWTC was established in 1979 to respond to a need for exhibition space as well as to provide a facility for conventions and large meetings. Thus, in the same year the iconic tower representing DWTC was constructed (DWTC, 2009). But just like Dubai, the DWTC was not merely content with the acquisition or construction of one building, since the early 80s up to the present the company is more than willing to build new facilities and acquire new businesses in order to provide a wide array of products and services.
Due to the real estate boom and the fact that Dubai is becoming a major financial centre in the region, many investors are coming in, pouring foreign investments as well as building their corporate centres so that they can showcase their products and services. It follows that for companies that sells boats, condominiums and other large man-made structures there is a need for a convention centre or an exhibition centre that will be able to hold and display products and prototypes so that a large number of people all over the world can see and appreciate.
This kind of business requires a significantly large floor space as well as support facilities that will be able to offer a comfortable and relaxing stay to guests, potential customers, and investors. In other words there is a need for hotels, restaurants and other related services. The DWTC firm is mindful of all those needs and requirements. As a result the company is not only involved in the business of hosting and management events but also in other businesses that will cater to the needs of the participants. The firm is also into the hospitality industry such as food and beverage, hotels and technical support groups that will help ensure that the exhibit or convention will continue without a major problem.
The proponent of this study would like to point out that the company is making money even if there is an ongoing global financial crisis. This simply means that DWTC exhibits, expos, and conventions can easily generate interest in a particular product launch that investors and various businesspeople are making a beeline towards DWTC headquarters for the purpose of booking their next event. This also explains why business is doing relatively good when it comes to the hospitality and technical support department. But it seems that there is a department or business unit that is underdeveloped. Using the tools of external and internal analysis the proponent of this market research will attempt to find out if it is practical and feasible to invest more on the housekeeping industry.
Market
Housekeeping is not just about cleaning the rooms of hotels. It is not just about being a room attendant. Housekeeping is also involve in office cleaning, cleaning and maintaining exhibition halls, coordinate with technical people when it comes to preparing the machines and equipment needed for a particular event etc. In other words one way of describing housekeeping is to also call it facility management. According to management experts, facility management is not only an important component of business, but the outsourcing of facility management is becoming a trend (Cotts & Rondeau, 2004). They provided the reason for this trend and explained that companies who provide this kind of service is not only fielding workers but they are also experts when it comes to advising on, “…new ways of making their facility assets more productive” (Cotts & Rondeau, 2004). Truly, the way people conduct business in the 21st century has evolved tremendously.
These changes can be a double-edged sword, it can be an opportunity and at the same time it can also be a threat. A commentator was able to put it succinctly when he said, “A change in industry structure offers exceptional opportunities, highly visible and quite predictable to outsiders. But the insiders perceive these same changes primarily as threats” (Drucker, 2007). In the case of DWTC’s Housekeeping department the evolution of facilities management as a major component in global business can be a tremendous opportunity and at the same time a threat if others companies can quickly offer substitutes and alternatives by way of providing their services to companies that are renting from DWTC. In other words instead of outsourcing services requiring facilities management and housekeeping it would be best to keep it all within the control of DWTC.
It is easy to show the growth potential of the Housekeeping Department (“HK”) by simply looking at the revenue stream that significantly increased from a mere 1.3 million AED in 2005 to 6.0 million AED in 2008. This is the reason why many business groups are interested in taking a slice of the pie. In the case of hotels there is nothing that DWTC can do because they either have their in-house HK department or they outsource (Jones, 2008). But for venues and events under DWTC there can be no excuse as to why its own HK department was not the one that was hired to do facilities management and other related tasks.
Strategy & Strategic Management
A strategy is a term developed by the Greeks and it is related to warfare. In fact, the Greek word “strategos” means a commander of an army. Thus, a strategy is a series of commands or an idea that guides workers in the same way that a general can guide his foot soldiers on how to position themselves in battle and what they are supposed to do once they reached their designated areas or battle stations. A management guru provided the following definition of strategy and it is a:
… general programs of action and deployment of emphasis and resources to attain comprehensive objectives; the program of objectives of an organisation and their changes, resources used to attain these objectives, and policies governing the acquisition, use, and disposition of these resources … the basic long-term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals (Weihrich, 2009).
Since the main purpose of strategy is to provide clear objectives then it follows that strategic management is a leadership initiative that will help employees and workers to achieve those goals (Hitt, Freeman, & Harrison, 2001) Strategic management is very dependent on reliable information (Grant, 2002). There is a need to sometimes empower and authorise a team of researchers to gather data regarding the company as well as the competition (Aharoni & Nachum, 2000). Using this information the CEO and corporate leaders will be able to make accurate assessments of the market and then provide guidance or issue directives to steer the company away from danger and lead them to a level of success never experienced before.
External and Internal Analysis
External Analysis
It is important to focus on Porter’s potential entrant and barriers to entry. This framework will help understand the strength and weakness of HK when it comes to the entry of competitors. First of all, it must be pointed out that the significant competitive advantage of HK is linked to its association with DWTC. In this regard it must also be stressed out that DWTC is virtually a monopoly when it comes to the venue management and exhibition facilities business. Due to the limited space in Dubai it would be difficult to imagine a rival company that will be able to construct and develop facilities in the scale and scope of DWTC. As mentioned earlier this company started in the early 80s and therefore it is already well-entrenched.
Still competitors can still set up shop and challenge DWTC in the housekeeping sector. It will not be too difficult for them to establish a company that will allow for the outsourcing of housekeeping and facilities management services. Yet, on the other hand DWTC can easily apply pressure so that they will realise that it will not be very easy to make money in this business. How can DWTC increase the barrier for entry? Firstly, when clients call to rent a venue for their upcoming conventions, corporate events, or exhibitions DWTC can make an offer that includes HK. The company can come up with a package that is difficult to resist therefore ensuring that every time a DWTC is rented or leased, it would be DWTC’s HK department that will be hired to do the facilities management and maintenance.
The company can increase the barrier for new entrants by asking outsiders to pay a certain fee every time they come in as an outsourced firm working as facilities managers and being in-charge of cleaning up the venue. There can be many ways to justify this fee because DWTC owns the said facility. In this manner DWTC can significantly increase their operating costs and therefore discouraging them from entering into the facilities management business. Thus, DWTC can easily corner the market and for future clients there is no sense negotiating with multiple service providers when they can have the convenience of talking to only one firm able to handle both the facilities and housekeeping aspect of venue management.
The BCG Matrix will reveal that the HK business unit is not a “dog” in terms of its potential and current performance. It is a “star” because it has the potential of becoming a “cash cow” but at present it will require more investment and more improvements in the system to make it more competitive not only as a component of DWTC but also as a possible outsourcing firm that can cater to the needs of hotels, offices, and facilities outside the jurisdiction of DWTC.
The Critical Success Factors will help reveal that the government is determined to increase its revenue stream by attracting more investors and by pouring in more money to real estate related ventures. Thus, the leader of the HK business unit can be assured of future growth and access to future markets. The HK group will be assured that more workers are needed. It is time to not only to increase the number of people working for this particular business unit but it is also time to plan ahead and make the necessary investments to sustain the momentum. On the other hand the Critical Success Factors can help reveal that Dubai is still on the path to economic growth and therefore there will be more expatriates and skilled workers that will be attracted to come here and therefore DWTC will always have a reliable source of workers coming in from the region, particularly in Asia.
The Internal Environment Analysis
The 7S Framework will reveal that the core values of DWTC is unrelenting growth by positioning itself as the leading provider when it comes to venue management and exhibitions. The company is willing to expand and this is the assurance needed by the HK business unit to plan in advance. By looking at the current strategy of DWTC one can see that it is not only interested in acquiring businesses that have something to do with large meetings, conferences, expos and exhibitions, it is also dedicated to providing related services such as in the hospitality industry. In this regard the company is also opening up more opportunities for the HK Department.
Generation of Options
Using the aforementioned tools for external and internal analysis the proponent of this study was able to identify the needs of the industry as well as the opportunities available in this particular industry. The HK business unit can ride the wave of the ongoing economic boom as well as the dominant position of its parent company the DWTC. In this regards the HK business unit can make drastic improvements as well as re-engineer itself not only as a “cleaning and maintenance arm” of DWTC but also as a business entity that can offer its services to hotels and offices outside the jurisdiction of DWTC.
The stakeholders such as the investors, employees, the government, and even the hotel industry in the area will not object to this development because it will help them in the long run. The investors will make more money and provide more earning opportunities for current employees. The hotel industry on the other hand will be able to solve a perpetual problem which is how to tap human resources that can help them maintain their facilities. For many hotel owners and office facilities manager it would be cheaper to outsource rather than to maintain their own staff that will do mundane tasks such as cleaning a venue, hotel rooms etc.
Department & Strategy
Identification of Options for Department
Once the HK business unit is ready to accept the challenge the next step requires them to deal with their strengths and weaknesses. Their strength can be linked to the “economies of scale” meaning due to the scope and dominant position of DWTC in the venue and event management sector the HK department can afford to maintain a large staff. They can also make future plans and initiate a training program that will ensure the availability of workers during peak months.
Identification of Options for Department
When it comes to their weakness they only need to look into some of the top complaints of tenants, clients and even by the corporate leaders of DWTC. Some of complaints are related to cost and the need to increase the number of cleaning staff. From a management point of view, HK personnel are more often than not have direct access to customers. Customer feedback must be redirected to top management and not just allow it to remain within the HK department. Therefore there is a need to improve the feedback mechanism.
Selection of Option
The HK business unit must propose a business plan to DWTC. The said business plan will allow the HK department to have more freedom to develop itself into a semi-autonomous business unit. In other words HK will be able to radically improve its image and its functions so that it can be marketed as a business entity able to provide workers that are skilled in all aspects of housekeeping. In other words the HK department can directly communicate with hotels and offices outside the purview and domain of DWTC and as a result this business unit will be able to generate income during peak and off-peak seasons if there is such a thing in Dubai.
Strategic Management Plan for Department
The current head of the HK department must ask for an increase in funding. This will allow the HK department to plan ahead. One of the first major improvements is the creation of a team that will improve the hiring capabilities of the HK department. This is also in response to the high cost of housekeeping. One solution is to streamline operations and be able to develop mechanisms that will allow HK to hire workers in the farthest regions of Asia and have the wherewithal to train and develop them into world class workers. In this regard the HK department can hit two birds with one stone. It will be able to lower the cost of housekeeping while at the same time sustain the flow of workers that it can field to various hotels, offices and venues.
Conclusion
Using the various strategies and various tools for analysis, it is hard to ignore the fact that the HK department is in a very advantageous position as far as housekeeping and facilities management jobs are concerned. Being under the domain of DWTC allows it access to lucrative deals such as world-class exhibitions and expos. The DWTC’s acquisition of hotels and other businesses related to the hospitality industry ensures future market growth for the HK business unit. But the department has limited itself as being a mere support agency for DWTC.
It is time to spread its wings and think big. After all it is situated in Dubai a city where businessmen and venture capitalists are trying to do something that has never been done before. This mindset must also be in leadership of the HK department. It is time to think far ahead and see that the economic boom as well as DWTC’s commitment to growth and expansion can only mean more opportunities for the HK department. It must leverage its resources so that it can also tap into markets outside the jurisdiction of DWTC.
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