DB FPX 8415 Assessment 3 Company Analysis Framework

Acquisitions are a component of corporate strategy involving the combining, buying, and selling of companies or assets to promote enterprise growth and increase shareholder value. They can enhance financial power, market share, and business activity, enabling further development and expansion. Acquisitions also offer opportunities for efficiencies through economies of scale. Developing acquisition criteria is essential for evaluating prospective companies.

Key acquisition criteria for investors in the hospitality industry include access to a multiskilled and flexible workforce, franchise chain affiliation, word-of-mouth benefits, proximity to key markets, quick adaptation to new technologies, and effective stock control. These success factors are crucial according to IBISWorld (Ristoff, 2022). ME-HP can ensure informed decision-making with a multi-criteria decision-making framework, involving people, processes, governance, and decision-support tools. This framework should include criteria such as Human Capital, Technology, Financials, Intellectual Property, and Synergies.

Reflection

A strategic decision-making framework offers a comprehensive view of new market opportunities, positioning investors for success. Investors must act quickly while conducting due diligence to avoid high failure costs. An effective framework provides valuable market potential information, helping businesses differentiate from competitors.

IBISWorld projects continued growth in the hospitality industry, especially in extended-stay hotels, boutique hotels, spa and health retreats, and resorts (Ristoff, 2022). Hotels uniquely function as both real estate investments and operating businesses dependent on a service delivery system. Hospitality firms must develop a suitable service delivery system that meets customer expectations and aligns with firm resources and capabilities (Seyitoğlu & Ivanov, 2020).

The COVID-19 pandemic’s economic fallout caused significant financial stress for hotel owners, potentially affecting the long-term viability of many hospitality firms. ME-HP needs to understand the target market’s position and forces, legal or regulatory factors, company culture, staff morale, brand awareness, distribution channels, and customer factors to fully grasp acquisition benefits. This can be achieved using a strategic decision-making framework.

References

Adams, C. (2021, October). Why the hospitality industry must reinvent itself as labor shortage still looms. Forbes.

Gopalakrishna, P., Haldorai, K., Seo, W., & Kim, W. (2021). COVID-19 and hospitality 5.0: Redefining hospitality operations. International Journal of Hospitality Management, 94.

Pillai, S. G., Haldorai, K., Seo, W. S., & Kim, W. G. (2021). COVID-19 and hospitality 5.0: Redefining hospitality operations. International Journal of Hospitality Management, 94, 1–11.

Ristoff, J. (2022). Hotels & Motels in the US (72111). IBISWorld.