Management

DEFINITION: 'A business plan sets out the method for running a specific activity over a specific future period.' (Stutely, 2005)

The CEO, Simon Dalkeith should prepare the business plan whilst always keeping the Companies overarching objectives in focus. The plan should consider key factors, both Internal and External, which may affect Companies long term plans and objectives. The plan must be both flexible (in terms the ability to change in light of market changes) and consistent with the companies short term goals.

When preparing the Business Plan for Clover Hotels, the 1st key factor that should be considered is the Strategic position of the company (Stutely, 2005). Key questions to take into account when considering the strategic position would be:

 Where is the company now?

 Where does the company want to go/focus?

 How will the company get there?

As part of this process the key business activities and the current status of the business should be defined. Importantly, successful business plans are usually developed by taking a top down approach to setting objectives (Stutely, 2005). The CEO should involve managers from all levels of the company structure.

The key activities and current status of the business should detail Clover Hotel's mission and values, current capital/share price, previous activity in the industry sector, the organisational and management structure (details of key personnel for implementing the plan), current infrastructure and types of products/services the company offers. This will include the Core competencies of Clover Hotels PLC (A SWOT analysis would provide the majority of this data, see Appendix B).

The CEO of Clover should also consider the external market conditions, competition and Clovers market position. This can be analysed using the Porter's Five Forces framework (See Appendix D). The model can be used to identify sources of competition in an industry/sector; in this case it would be the hotel and catering industry. For example, the CEO should examine relevant reports from leading specialist consultants in the industry that identify market trends and customer demands, in order to make informed decisions when preparing the plan.

In addition, the CEO could also use PESTLE (See Appendix E) to analysis the external environment that the company is operating in and the key factors to take into account when aligning the Business Plan with the company's objectives (Johnson et al, 2004). Examples for Clover Hotels PLC include:

 Economic - recognising the impact of an instability of demand and seasonal variations (increase in price at Christmas, change in demand for customers throughout the year).

 Technological - recognising technological advances and how that can serve the objectives.

 Legal - the working time directive, especially in the service sector.

 Social - Changing trends in customer eating habits. For example, obesity in society.

A successful business plans not only take the external environment into account but also the internal factors and core competencies of the company. This can be achieved by undertaking a SWOT analysis identifying opportunities and threats of the external environment, taking into account the strengths and weaknesses including the resources and capabilities of the company as it stands. For example:

 Adequacy of resources within the company in terms of capital, buildings, management, financing, staff.

 Human Resources: Skills required of employees, staff training plans.

 Effects of compliance with the minimum wage.

 Economic factors, such as current strength of the pound.

The CEO should also look at strategy development when developing the Business Plan. The CEO could use Ansoff's Matrix (See Appendix C) as a basis of strategy development (Ansoff, 1998). The model would allow for discussions on directions for strategy development, and options available to the organisation in terms of its development into products and markets. For example, Clover Hotel's offering a new product in the same market, e.g. The American diner themed restaurants.

The CEO should define Clovers core objectives and develop a strategy for achieving them. At present Clover Hotel's objectives are unclear and informal. The company should identify a mission and a vision and develop core objectives to work towards implementing its future plans. A formal strategic plan would then have to be implemented to drive the company forward. Possible formalising of Clover's objectives into a strategy for example could include:

 The expansion of the capacity of the rooms by 20% in the next 2 years, this should state how they are going to maximise there occupancy and identifying current issues in relation to current position, i.e. current low occupancy rates. This may also include implementing internet booking and a marketing strategy.

 Refurbishment and restructuring

 Expanding into the restaurant market, i.e. American diner.

Finally, the CEO should identify risks and opportunities, developing a strategy for limiting risks and exploiting opportunities. The Risk Management exercise should be undertaken once analysis of the current market and defined objectives has been set. The business plan would identify how this would be developed including, having a risk manager, perhaps a risk team and adopting a risk methodology.

Part B:

Internal audits role must be balanced carefully between an assurance and consultancy service, and should also ensure independence and objectivity is maintained throughout.

It is essential that the Refurbishment plan is aligned to the overarching corporate strategy of Clover Hotels PLC. The main reason for this is that it is the refurbishment plan is a long term activity. It should therefore being included as one of the key corporate objectives. The business plan should include realistic forecasted