b plan sterling resort

8/4/2019 B Plan Sterling Resort

1/19

B-Plan

Sterling Holiday Resort


2/19

Finance


3/19

36.85

31.02 30.59

2008 2009 2010

Sales (In crores)

Series1

Sales is decreasing continuously

Reason being the bad performance of Time share segment

11.557.58 7.45

-12.08

-38.13

-11.72

2008 2009 2010

Time Share Segment

Revenues Profit(loss)25.3

23.44 23.13

4.6 3.4 3.2886

2008 2009 2010

Resorts and hotel segment

Revenues Profit(loss)


4/19

98.1%

184.1%

104.4%

2008 2009 2010

Admininstration and other expenses (as

a %age of sales)

Admininstration and other expenses

As we can see that the administration is exceeding the sales, reason being the non-

performance of time sharing segment. Time sharing segments administration costis eating up most of the profit generated by Resort and hotel segment. So there is

need to either restructuring of Sterlings time sharing concept or the harvesting of

this segment (may be at loss)

-9,003,813

-218,187,162

-90,222,543

2008 2009 2010

PAT (loss)

PAT (loss)


5/19

447,473,290

300,783,454

178,439,055

2008 2009 2010

Decreasing debt funds

Level of debt is decreasing..

Which is helping Sterling to control its interest expenditure (as interest rates are

growing)

13.02%

14.44%

13.47%

2008 2009 2010

Interest as a %age of Sales


6/19

Problems at MarketingF

ront:

Unattractive logo

Communication gap between

brand and customers

Lack of Value Addition

Activities

Non aggressive

marketing

Lack of awarenessamong TG

Monotonous

website

Inactive social

networking accounts

Unsatisfied Customers


7/19

From Vision and Mission statement:

Both statements reflects that package at

Sterling is very affordable, fun filled and one

can use this packages as a gift to some dear

ones

It reflects that its target customers comes

under the age bracket of 23-30, because this

group has less disposable income and looksfor value for money


8/19

Pricing

Sterling is very affordable and has the low pricefrom its competitors. Its packages also reflect thatit has customer centric approach, which is in sync

with the target customers. Active Customers: 35%

Major revenue comes from South/west region

The percentage of active customers reflects that

there is not much problems in terms of pricingbecause decent no. of customers are active incomparison to.


9/19

Expenses on advertisement in last

three years

0.69%

0.08%

0.79%

2008 2009 2010

Advertisement (as a percentage of

sales)


10/19

Problems @ Communication End

Sterling have not done anything good in terms ofmarketing and communication

No evidence on the internet available regardingadvertisement and communication, which shows that

Sterling has done nothing to attract the Target Group. Data at the balance sheet also reflects that they have

spent less than 1% of sales to the advertisement, whichis far below than its competitors

It reflects that despite of having competitive prices

and back hand resources, TG is not aware of thepresence of Sterling Holiday Resorts, results in less no.of customers.


11/19

Problems @ Branding End

As the brand is associated with bad rumors inin the market, it is negatively publicized to itsthe stake holders, customers, management

staff and investors because of its operationaland financial problems.

The best possible solution available to them isto rejuvenate their brand and make stake

holders feel that all rumors were past andgrowth is the future


12/19

Solutions for the marketing problems:

Sterling Holiday Resorts require doze ofRebranding : they need to design theirLOGO, tagline, advertisement theme, focus to TGand their requirements and marketing channel

etc At Communication front, they need to do

aggressive marketing to create awareness amongthe TG on online and offline. For Example: Sterling

has only 102 like on its Facebook page.which is veryless in comparison to Club Mahindra with more than8000 Facebook likes.


13/19

Operational Problem

Lack of quality of service in terms of

food, transportation, power

failure, security, non-working lift, not

well-maintained(Clean) rooms etc.*

Deficiency of Middle and Top level efficient

employees*

http://www.tripadvisor.in/ShowUserReviews-g297679-d300955-r115881246-Sterling_Fernhill_Resort

Ootacamund_Tamil_Nadu.html, http://www.sterlingholidays.in/wonder-moments/testimonials

SHRIL_Corporate_Overview.pdf, http://www.sterlingholidays.in


14/19

Attrition Rate In Industry

According to Associated chamber of commerce & industry in India, New Delhi

The attrition rate in the hospitality industry in India is alarming at the rate of 10

per cent per annum.

0%

10%

20%

30%

40%

50%

60%

2004 2006 2008 2010 2012

Attrition Rate


15/19

Reason ofAttrition

According to Naukrihub.com 2010 the topmost reasons of high attrition rate in the hospitality

industry are as follows-

Compensationpackage differences

Less EmployeeEngagement and

Recognition

Activities

Low Developmentopportunities

Poor supervisionInferior

facilities, tools etc,

Job and employeeskill mismatch.

Non- cooperationwith senior.


16/19

According to Indian Hotel Compensation Survey 2011

1%

37%

38%

75%

56%

20%

70%

3% 33%

Percentage of growth in median salary in 2010/11 over2007/08

General Manager

Financial Controller

Human Resources

Manager

Front Office Manager

Executive Housekeeper

Food & Beverage Manager

Executive Chef


17/19

Compensation Package Difference

According to the leading business newspaper Mint-

Assistant housekeeping manager with two to three years experience on the Cunard

lines makes about $1,900 (Rs. 82,650) a month while an assistant purser front desk

receptionist for the same liner, with some experience, will get about $1,650

(Rs. 71,775)*.

*http://www.livemint.com/2007/10/12142132/Hospitality-attrition-rate-may.html


18/19

Recommendation to Reduce Attrition Rate In The

Company

a) Adopt attractive recruitment policies

b) Need of well structured Training & Development programme to provide quality

service to customers.

c) Increment in Employee Engagement /Motivational Activities.

d) Reward hard work & talent(Employee Retention Strategies).


19/19

Role of Leadership Mr. R. Subramanian in his position as Chairman and

Managing Director of Sterling Holiday Resorts India Ltd.had no prior experience in the specified field or in themanagement cadre. He had experience and expertisein financial and general management. He had workedfor large industrial houses both in India and abroad ashead of Finance and Chief Executive but had no realexperience in managing any business. Eventually whena strong competitor arrived he had no answer to reactto the competition and finally fumbled to accumulatehuge losses only to disappoint both the customers andshareholders*

http://www.wealthbull.com/stock-market-today/586-rj-eying-on-sterling-resorts-should-we-follow-him

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