Executive Summary
Resort World Sentosa is one of the two recently introduced integrated resorts in Singapore, by which the country tries to gain competitive advantages in the tourism and gaming industries. Currently, Singapore stays behind Malaysia, Thailand, and Indonesia in the tourism industry, and to catch up with the major competitors it needs to modify Resort World Sentosa from a mere gaming destination into a comprehensive holiday resort. For this purpose, Resort World Sentosa should use diversification and customization of services, support of the service concept by internal operations, and modified employment and training policies that are not copied by other industry players.
Introduction
For such a relatively young nation as Singapore, tourism is the basic industry that provides the country with the bulk of its income (Singapore Tourism Board, 2010). At the same time, Singapore faces fierce competition with other Asian countries like Thailand, Indonesia, and Malaysia in the areas of tourism and gaming industries (Yeoh et al., 2001, p. 7).
Drawing from this, the development of the concept of IR, an integrated resort, and the subsequent launch of the first two of them in early 2010, can be viewed as a powerful step taken by the government of Singapore to gain a competitive advantage in the rivalry with other industry players (Kyodo News, 2010). Resort World Sentosa is one of those two IRs, but its development poses one basic challenge to its management, i. e. making Sentosa a one-stop gateway for tourists from around the world.
Industry Analysis
Competition
As stated above, the competition in the tourism industry in Asia is rather fierce as the number of countries, besides Singapore, bases their development on income from tourism services they offer. Malaysia, Indonesia, and Thailand are the three main competitors Singapore has to rival to increase its market share and attract larger numbers of customers (Yeoh et al., 2001, p. 7). Trying to stand this competition, the government of Singapore and the Singapore Tourism Board have developed the Singapore Tourism Policy, according to which the country aims at the growth of tourist arrivals and revenues to 17 million people and S$30 billion respectively (Kyodo News, 2010). It is also expected that the Policy will allow Singapore to increase its GDP by 1 – 2% and create about 20,000 additional working places in the country.
Resort World Sentosa’s Position
Thus, traditionally Singapore has been viewed as the country taking a disadvantaged position in the tourism industry as conditioned by the small size and lack of natural resources (Yeoh et al., 2001, p. 7; Yeoh and Chang, 2001, p. 1026), and the launch of the Resort World Sentosa was one of the government initiatives to change the situation and carry out a substantial breakthrough in the tourism industry (Sentosa, 2010; Singapore Tourism Board, 2010).
Needless to say, the fierce competition in the industry makes this a challenging task as, for example, the Malaysian Resorts World Genting is now one of the largest IRs in the world with an annual reception of 19 million visitors (Kyodo News, 2010). Accordingly, to stand the competition and succeed in the industry, Resort World Sentosa and the government of Singapore should take considerable steps discussed further.
Resort World Sentosa
Service Offerings
So, starting to consider the Resort World Sentosa, it is necessary to examine it from the point of view of operations management. Slack et al. (2007) define four Vs as the milestones of operations management including volume, variety, variation, visibility (pp. 16 – 17). The ideas of services offered fits into the variety concept as, simply speaking, every customer has individual wishes while on vacation and it is the task of resort management to combine all possible services to satisfy the needs of the largest number of customers possible. Currently, Resort World Sentosa provides a considerably wide service variety, but it needs customization, as argued by Wisner et al. (2008, p. 25) and Metters et al. (2008, p. 43), to provide better customer contact and individual service approach.
Dimensions Targeted for Excellence
In more detail, the major difference that Resort World Sentosa should display if compared to other IRs in Asia and other countries is it is being not a mere gaming destination but a place for comprehensive recreation to which a person can come with a family and find interesting activities for all its members. Pride (2009, p. 170) refers to this need as to the phenomenon of diversification, which helps to satisfy the most varying needs of customer groups. In particular, Resort World Sentosa has a well-developed gaming services’ segment (Sentosa, 2010), and to achieve diversification and customization of amenities it should work on perfecting:
- Family recreation activities;
- Hotels and other accommodation facilities;
- Children entertainment facilities;
- Sporting activities for those preferring active recreation;
- Nightlife services assortment.
Dimensions Not Considered
At the same time, Resort World Sentosa should also work on becoming different from its competitors in not covering the points in service assortment that others cover by Sentosa considers irrelevant for the industry. According to Johnston (2003, p. 142) and Slack et al. (2007, p. 73), such an approach can present a sustainable competitive advantage to a business company as far as service refinement allows creating unique services and/or products that competitors cannot copy. So, to focus exclusively on the above-listed items targeted for excellence, Resort World Sentosa should not:
- Develop its gaming services further;
- Advertise the resort as a mere gaming destination or a huge casino.
Internal Operations
Service Concept Support
Further on, Resort World Sentosa should pay considerable attention to the development and support of its service concept. Defined by Johnston (2003) as “a clear and simple statement of the overall form, function, purpose, and benefits of the idea” (p. 104), the service concept is the succinct and clear formulation of business goals and means of their achievement. Formulation of a mission statement and a strategic vision is the basic internal operation that Resort World Sentosa should work on for service concept support. The recommended vision statement for the company can be: “To become a one-stop getaway holiday destination in Asia that provides a comprehensive range of services and allows its customer get all they need for a good rest in one place”.
Pricing Policies
Needless to say, the formation of the vision statement is not the complete support to the company’s service concept. As Pride (2009) argues, pricing policies allow businesses to gain competitive advantages because competition based on pricing is one of the basic types of business rivalry (p. 185). Drawing from this, Resort World Sentosa should also compete on price to achieve one of its major goals, i. e. attracting larger numbers of customers and increase its revenues to the desired levels of S$30 billion by 2015 (Kyodo News, 2010). The initial policy that Resort World Sentosa should use for making its pricing policies more competitive is to diversify the assortment of services it offers.
The logic of this step is simple: the larger amount of services allows reducing the price of each of them without dumping this price. In its turn, this price reduction accompanied by service assortment diversification will not damage Sentosa’s income and will allow attracting new customers.
Customers
Influence of Customer Behavior
Needless to say, the influence of customers’ behavior on any company that operates in the tourism industry is huge. This fact is referred to as the bargaining power of buyers in Porter’s Five Forces Model (Yeoh and Chang, 2001, p. 1038), and this power increases proportionately to the strengthening of competition and accessibility of similar products and/or services in the market. The above discussion reveals that the competition in the tourism industry in Asia is the fiercest if compared to other regions, which makes the influence of customer behaviors quite important in it. In simpler terms, customers from all over the world can choose to either go to Singapore or another destination, and this choice will determine the success of Resort World Sentosa and other resorts in the country.
Customer Behavior Management Plan
Accordingly, to cope with the considerable power and influence of customers and their behaviors on the company, Resort World Sentosa should have a customer behavior management plan. In theory, there is no uniform structure for such a plan as contexts of their use and conditions of every particular company usually differ. Therefore, it is possible to develop only a draft of such a plan for Resort World Sentosa and determine a testing period to monitor its efficiency. The basic elements of Resort World Sentosa’ customer behavior management plan are:
- Survey levels of customer satisfaction;
- Attract new customers by special offers, price reduction, and discounts;
- Encourage loyal customers by special programs, bonus systems, and prizes;
- Establish departments responsible for each of the three above listed activities;
- Regularly monitor the plan efficiency and make necessary corrections in time.
Employment
Employee Selection and Training
In addition, Pride (2009) stresses the importance of employee selection, recruitment, and training to gain a competitive advantage and achieve the end-state long-term strategic goals of a company. The best selection practices, as argued by Pride (2009, p. 257) and Wisner et al. (2008, p. 364) include collecting data on applicants before their employment and deciding, based on those data and interview results, which applicants are most fitting for fulfilling the company’s tasks. Thus, to succeed in the selection and training of its employees and retrieve a competitive advantage from it, Resort World Sentosa should:
- Establish a separate HRM department to deal with selection and training issues;
- Base employment decisions on applicants commitment to work, rather than financial needs or professional qualities;
- Provide every employee with free training in the area of tourism business he/she prefers;
Employee Quality Service and Ongoing Management
Further on, ensuring that employees provide high quality service to customers is one of the basic tasks for the ongoing management of the staff and management performance. Motivation, as Slack et al. (2007, p. 271) and Johnston (2003, p. 109) notice, is the driving force of performance improvement, and to ensure its successful use in the company, Resort World Sentosa should:
- Assess its short-term and long-term performance goals;
- Introduce reward/punishment system to encourage employees for better performance;
- Regularly monitor employee performance and substitute underperforming employees with new ones.
Conclusions and Recommendations
Concluding Remarks
Thus, the above-presented discussion reveals that Resort World Sentosa can become an opportunity for Singapore to develop its market share in the tourism industry and gain competitive advantages over its major rivals, i. e. Malaysia, Thailand, and Indonesia. However, to achieve this Singapore should develop Resort World Sentosa using the further provided recommendations.
Basic Recommendations
So, based on the above discussion and references to the relevant theoretical views it is recommended that Resort World Sentosa should take up the following initiatives to succeed in making Resort World Sentosa “a one-stop getaway holiday destination in Asia”:
- Carry out customization and diversification of its services;
- Improve the services targeted at the various customer groups;
- Avoid positioning the resort as a mere gaming destination;
- Develop a clear vision statement and the competitive pricing policy to support its service concept;
- React properly to the impacts of customers’ behavior upon Resort World Sentosa;
- Introduce and practice unique employee selection, recruitment, training, and management strategies.
The above-listed recommendations are expected to allow Resort World Sentosa to achieve its goals. At the same time, the efficiency of the recommendations’ practicing depends upon the context, market conditions, and macroeconomic factors. Accordingly, changes to the recommendations can be made as soon as the external and internal conditions of the company change.
Reference List
Johnston, R. (2003) Cases in operations management. Pearson Education.
Kyodo News. (2010) Singapore’s 1st casino resorts ready to open their doors. Focus. SMU. Web.
Metters, R. et al. (2008) Successful Service Operations Management. Cengage South-Western.
Pride, W. (2009) Business. Cengage Learning.
Sentosa. (2010) Resort World Sentosa. RWS. Singapore. Web.
Singapore Tourism Board. (2010) Singapore Government. STB. Singapore Tourism Board. Web.
Slack, N. et al. (2007) Operations management. Pearson Education.
Wisner, J. et al. (2008) Principles of Supply Chain Management. Cengage Learning.
Yeoh, B. and Chang, T. (2001) Globalizing Singapore: Debating transnational flows in the city. Urban Studies, 38(7), 1025 – 1044.
Yeoh, B. et al. (2001) Tourism in Singapore: Overview of Policies and Issues. In: Yeoh, B. et al. (eds) Tourism management and policy: perspectives from Singapore. World Scientific. p. 3 – 15.