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launched new brand and new extensions of brands, which include spas, resorts, destination club
memberships, retail outlets and residences. This simply means that the company has diversified
its channels of profit generation.
The company leadership has considered how to exactly tackle its growth its platform as a
corporate strategy. The management is not implementing more than one strategy of growth at a
time because doing this might burden centers of operation (BCC, 2008). The main growth
strategy that the company has adopted is that of diversification. This strategy has taken the
company outside the realm of its usual operations in terms of its products and services. Banyan
Tree stated with luxury resort and then expanded into spas, destination club memberships, retail
outlets and residences. It has also expanded to manufacture of products used in its residents, spas
etc. Typically no one will link a luxury resort company with retail outlets and residences but this
diversification generates sense to the company's business model and growth vision it had when it
began its operations. In this regard, a number of corporate strategies have been utilized by
Banyan Tree Company to meet its goals (Banyan Tree, 2008). All these strategies are relevant
because they are positively enhancing vision, mission, aims and goals of the company.
Industry Analysis
Porter's Five Forces Model
In this section an analysis of Banyan Tree Company is presented using Porter's Five
Forces model in relation to Auckland. This section will cover these areas: Growth Strategy,
Financial Management, social responsibility and IPO. Through application of this model of
analysis, we can be able to understand rivalry among existing players, bargaining power of
Banyan Tree buyers, bargaining power of Banyan Tree suppliers, threat of substitute services and
products and threat of new industry entrants.
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The five forces that determine the structure of industry of Banyan Tree Organization are
as presented herein:
Bargaining power of Banyan Tree buyers; if the customers or the buyers have strong power of
bargaining it means that they tend to push the prices down (BCC, 2008). When prices are pushed
down the potentiality of Banyan Tree to earn sustainable profits is limited. In Auckland, buyers
have strong purchasing power since they have high incomes. This means that the company will
realize sustainable profits when it is in Auckland because the bargaining power over here is
relatively low.
Threat of New Entrants; if threats to new entrants are strong then the suggestion is that the
current players will readily accept to earn less profit as a response to reducing such threats. In
Auckland threats to new entrants are strong because this is a booming industry with lucrative
profits. Most people are therefore willing to venture into this industry at the moment (BCC,
2008). The hospitality and tourism industry continues to grow aggressively; this is the reason
why many people are willing to join it. Other organizations have been formed and others are still
