Business Policy VB
Serena Li, Grass Cao, Amy Li, Lola Yang, Vicky Zhang, Sven Li
16 December 2012
Sias International University

Abstract
The objective of this paper is to help people know the clear information of holiday resort in China to promote this industry and bring innovation for this industry. We can refer to the successful cases to prepare for our future company. The holiday resort has an ability to attract people to come again by owning the advanced recreational equipment, beautiful environment and considerate service. Additionally, the holiday resort provides people with the happy and relaxing lives. With the rapid development of economy, people are willing to have a relaxation and close to nature. The holiday resort will satisfy customers. People simultaneously enjoy both psychological and physical comfort in holiday resort. This paper will use analysis of STEEPG, five-forces analysis, driving forces, key success factors, resource-based analysis, capability analysis, SWOT analysis. By analyzing, the important thing can show people clearly. Then, we come up with 2 strategic options. At last, we choose one strategy which is suitable for us to go, and we make further implementation for our company. Keywords: holiday resort, considerate service, analysis

Industry The history of holiday resort has one hundred years. At the beginning, holiday resort only provides accommodation with the good environment for customers. However, as China rapidly develops, holiday resort offers customers green food, the advanced recreational equipment and many interesting things. Some holiday resorts even offer customers hot spring. Let customers enjoy the real vacation to relax them. Besides, the holiday resort is often located in the suburban district, because those places have good environment and many scenic spots. Also, the holiday resort is closed to the central hinge of transportation of that province, which is convenient for customers to come. This analysis will include Now, we will analyze our four major competitors in China: Shajiabang Holiday Resort, Cheerful Forest Holiday Resort, Taoyuan Resort and Xiedao Holiday Eco-firm. Use analysis of STEEPG including social, technology, economic, environmental, political and global analysis, and also uses Five Forces, driving forces and key success factors. By analyzing our four companies, the important thing can show people clearly. Especially, companies will be analyzed in the form of surrounding environment and providing service. At last, we will rank these companies and get the result which holiday resort is more comfortable and suitable to go.
General environmental analysis (STEEPG)
Social
First, with the development of society, many persons bear the serious burden, such as work pressure and housing pressure. Devoting to improving their state, they need the place to relax themselves. Now there are not enough and comfortable the holiday resort to appear. Second, more people like to enjoy entertainment in China. China has a large population size, and the survey in 2008 shows that China has about 1.33 billion at that time. (Gaoxing, 2012)The large population size increases the need of relaxing place. Thus, holiday resort provides not only the recreational place but also the job opportunity for people. To a degree, due to the need of many employees to entertainment industry, holiday resort decreases the number of unemployment. Third, faced to the improvement of living, people are eager to enjoy lives, especially, the middle-aged and aged people. Because they feel that they have come to the enjoyable age group, most of them often choose the comfortable holiday resort to go. The reason is that holiday resort has many items to enjoy, such as organic food and recreational equipment. Last but not at least, the phenomenon that society discovers is that people often want to go the place that can offer them convenience, so as to keep balance between work and home. Holiday resorts are usually located in the good environmental place and nearby the scenic spots. Besides, in holiday resort, people can enjoy the good equipment and service. Therefore, people can play with their family happily and when they want to work, they can work by using advanced equipment that holiday resort provides to keep balance.
Technology
Holiday resort is a place for people who live in the city to experience the real farming life, especially Argritourism. The Argritourism provides not only the fresh vegetables and meat, but also the opportunities for people to experience how the vegetable to grow up and how to rise up the animals. The application of newest agriculture science and technology in a modern farm is a way to attract customers. The irrigation technique includes canal seepage control technology, low pressure pipeline technology and sprinkler irrigation, microspray irrigation technology and gravity drip irrigation technology. They can help to save water and improve water use efficiency. The green house makes it possible to control the light and the temperature, so that the vegetable and fruit can be planted in different season. In another hands, as more and more people are interested in DIY, the modern wine-making technology and storage technology may become the new way to draw people' attention. Nowadays, new energy attracts the attention of the world, which should be the opportunity for the industry. Moreover the government has taken measures to develop the new energy. The holiday resort should be the model to lead a new life style. It increases the attractive power if the holiday resort uses the solar energy to cook and bathe and wind energy to produce electricity and keep warm. At least it also helps to cut the cost down. In the world, there are so many countries building the windmill to generate electricity. It is seen that the windmill is appeared in Henan China. It has drawn people's attention not only the economic benefit it brings, but also the visual enjoyment. It is reported that the solar house have been built for scientific research by University of Science and Technology of China. (Jiang Yuxiang & Zenggao, 2012) The solar house can use solar to provide the electricity and keep warm or cool. This kind of house brings a new experience for people and offers the owner of the Resort a new way to run business. The modern life never separates from the high and new technology. It is easy to find that the high and new technology can be best embodied by the successful theme park. The most common technology is the virtual image, which includes the 3D, 5D and so on. It makes the image turn to stereoscopic and real. Through the technology, shake hands with the cartoon will become possible.
Economic
This industry is holiday resort, because the advance of economy and a growing number of people have more desire and enough salary of enjoy life. It means that in fact having more people wants to have a travel on holiday. However, as we all know, lots of people want to go some famous places in holiday, which leads to a terrible phenomenon that the places of interest will be crowded by people and people want to go travel nearby. Holiday resort is not far and has a lot of items to have fun. Now due to that society have very fast speed, people ,such like white collars and parents, have not enough time to go a far place and the holiday resort can satisfied their demands. This industry should find a place that has stable economy. Economy has growth condition, and high unemployment rates, like some developing countries. Like China, the holiday resort can set up the industry in China. Also, China’s economies have stable interest rate and inflation is not awful. China’s general economic conditions are growth, and it has a lot of opportunities to increase its economy. Based on this situation, the industry holiday resort can find low price of commodities and land, and industry refers to entertainment and need use a lot of local land resources. The low land price helps this industry reduce costs. What’s more, when the beginning of industry, this industry need to recruit new employees, and holiday resort has a lot of departments and those departments also need recruit new employees. The low unemployment rates and cheap labors are very advantageous for this industry. Besides, China has enough free and cheap workforces, it means that industry has huge and cheap workforce and industry can choose local workforce.
Environmental
Now, sustainable development becomes the popular belief, so it is very important to deal with the relationship between business and environment. For a holiday resort, it is very important to find a stable and sustainable business model, sustainable development and the reduction of the environmental impact of energy, water and material consumption. Now the solar energy is used around the world, and it is a new and clean energy and have many advantages, like safe, no noisy, no pollution and inexhaustible. The solar water heater and solar panels are used widely in holiday resort, because it is green initiative and congruous with national policy. Besides, the resource recycle is also vital, and many things are seems to be useless. Actually, people can use these things in another way. Thus, it is very important to build resource recycle facilities for a holiday resort, such as impounding reservoir and separate bins. The impounding reservoir can keep the rain, and the separate bins can let the rubbish use second time, which can protect environment and save cost. As the time changes, people pay attention to environment increasingly, consumption environment, the beautiful natural environment, the good housekeeping, and the proper placement of buildings. Recently, now most of the holiday resorts are far from the big city, because there are beautiful rural scenery, without noisy and gas. The good housekeeping and proper placement of buildings can make people comfortable. These measures are the important things to attract the consumers’ attention. Environment and holiday resort are inseparable, so it is very important to deal with the relationship between environment and holiday resort.
Political/Legal
First, government gives priorities to develop holiday resort industry and strengthen infrastructure construction. Second, relevant departments support in license processing and fees, tax and other support. Third, the financial institutions should actively provide credit support to farmhouse operating units, give appropriate preferential lending rate support as well. Fourth, the provincial government allocated special funds to support the development of all holiday resort, and introduced around the development of Agritourism policy measures, especially the underdeveloped areas farmers to take advantage of the existing family housing facilities, increasingly supporting offered family-run farmhouse. In accordance with the rating of "Henan Province, rural tourism business units and management specification"（Jiyuan Government, 2012）, New Farmhouse Trial Operation was named the star of rural tourism business units; Star Rural Tourism business units have been built farm named after the Lok upgrading, reward with the following criteria: a star rural tourism business units reward of 10,000 Yuan; star rural tourism business units reward of 20,000 Yuan; the three-star rural tourism business units reward of 30,000 Yuan; the four-star rural tourism business units reward of 40,000 Yuan.（Jiyuan Government, 2012）
Global
Refer to the factor of global, holiday Resort provides a good place for tourists to close to nature, enjoy the pure farm life, eat the countryside gourmet, etc. People from various places will come and have fun. Therefore, it is important to highly view the cultural sensitivities and attention to the taboos of minorities, as China has plenty of ethnic groups, such as Hui ethnic group don’t eat pork; it’s not allowed to sell beer to Muslims. Furthermore, when foreigners come to the holiday resorts, they experience the different culture. As the saying goes, “when in Rome, do as Romans do”. Foreigners see the culture and try to act as the natives. In addition, the industry of holiday resort has an emerging market. With the rapid development of economy, the quality of life has increasingly improved. People have more demands on leisure activities. More people prefer to choose coming to holiday resorts which is a good place to have fun, play with families and friends, close to nature as well. Last but not at least, holiday resorts always locate in small remote town resulting in the safe and peaceful atmosphere. In other words, there are no terrorism and security issues.
Industrial Analysis (Five Forces Analysis)
Threat of New Entrants The threat of new entrants is low. First of all, starting up this kind of business generally involves a significant commitment of capital. The new entrants need to find a good place where the environment is perfect for building the holiday. The place should be surrounded by the good natural environment and nearby the big city. The good natural environment will enforce the market attractiveness factors. The big city will provide the market at first and be helpful to open the new market as well. Actually this kind of land is difficult to find and the price of the land must be very expensive. If there are residents live there, it will spend lots of money to resettle and compensate them. So the large amount of money will also be a barrier. In another hand the new entrance need to get the permit like hygiene license and business certificate. So they should also build the good relationship with the governments, because the government can have an enormous effect on the propensity for new firm to enter an industry. But it needs a long time to build the relationship, and there is a fact that cannot be ignored is that the network circle is exclusive. Moreover, the customers have formed the consuming habit and the customer may resistance to new entrants. It may arise in the costs to switch to the new entrance's product or service. To expand the market, the new entrance should find out the trend of the industry and the market. Then, take publicity measures like advertisement to make the customers know their business. In fact, the most difficult point is accepted by the customers because the brand loyalty. Why do people pay you? The reason is that the value you can turn back. As we all know, a good brand means the high quality service and the professional employees. In an organization, the subject is the people. But to select the right person is not easy. It is more difficult to form the culture of a firm. Another question is will you be able to give the customers different experience? One of the key elements of strategy is the positioning of the business in a space that differentiates it in the mind of customers relative to the businesses' competitors. But it is possible that before new entrance starts their business, the existing businesses have made change. With low threat of new entrant, it's difficult to enter this industry.
Threat of Substitutes The threat of substitutes is low. There are some places, for example starred hotel, Disneyland, amusement park and multifunction entertainment center that appear in downtown recent years. These places have common purpose, but holiday resorts are different in other way. Starred hotels are always located downtown, but holiday resorts are located in the suburbs. The customers of starred hotel have great spending power, and this stands for social status. But the holiday resorts are open for most of customers, because the price is lower and most of the customer can afford it. Disneyland is very few. There are only few big cities having Disneyland. But many holiday resorts are more closed to nature. Many multifunction entertainment centers appear in downtown recent years, the multifunction entertainment are more closed to the market, very convenient, and some customers are single. Holiday resort can receive customers in group, and many families choose holiday resort. Starred hotel, Disneyland and multifunction entertainment are located in downtown and the price of land is high. Holiday resort is always located in suburbs, is far from the big city and the price of land is low. So the substitutes' switching cost is high. As holiday resorts are more closed to nature, people can enjoy rural scenery, clear water, clear air, and have a different and amazing experience in holiday resort. The substitutes can't provide the similar service. Now, as the time is changing, the transportation is more convenient. Most people like to get close to nature and enjoy the health life, but the substitutes can't. Therefore, the holiday resort is unique and the threat of the substitutes is so low that it is more attractive to enter this industry.
Bargaining Power of Buyers Holiday resort has low bargaining power of customers. “The bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure, which also affects the customer's sensitivity to price changes.” It means that customers do their best to demand this industry to make lower purchase price, customers require highly quality products or they want to more high quality service. The industry should pay attention to the customer’s sensitivity of price. Holiday resort not only appeals to the local customers but also is attractive to surrounding areas. This industry mostly focuses on those people who don’t have enough time to rest, such like white collars and parents. White collars need a place to rest and children are arranged a place to play. The white collars don’t have sensitivity about price, however, the parents and children care about products and service and price and they want to have good products, service and reasonable price. The customers for the industry sometimes may be few, sometimes may be a lot of people, like some tourists or a company organized. If the total number of customers is large, the bargaining power of customers will be high. On the contrary, if the total number of customers is few, the bargaining power of customers will be low. With the advance of technology increasing the power of customers, people know more the industry information, and they will compare with competitive price, product and service, which make customers own more power. If they have enough information, they use the information between the industry and competitor. It means that competitors of this industry more care about price and service and make it lower. Too low price leads to declining this industry’s profits. However, those customers who visited holiday resort maybe become potential threat because they enjoyed the industry and they got a lot of information about this industry, maybe someday they become the threat of backward integration. But the holiday resort hardly happen those phenomenon, holiday resort don’t have products of unified integration. Customers hardly visit holiday resort and buy plenty of products like manufacturers. So, the holiday resort has low bargaining power of buyers.
Bargaining Power of Suppliers When analyzing the bargaining power of suppliers, we found it is low in the industry of holiday resorts as follows. For this industry, the main suppliers provide construction, equipment, food and maintenance, etc. To begin with, this industry has low supplier concentration. About construction, the biggest cost of holiday resorts, it is low concentrated in the business. There are many construction teams and it requires less high technology in constructing. Construction team just builds the resorts according to our requirements. Besides, holiday resorts need many types of equipment, such as fishing pool, irrigation system. However, there are many suppliers offering that equipments which means we have the power to make decisions on which supplier. We maintain a great advantage. Next, construction hold the most input of holiday resorts, and it takes over more than 30% of the total cost. In this way, choosing a reasonable construction group is a vital issue for the industry which will determine the price of our product and service. In other words, it will decide whether you have the competition advantage in the industry.
Moreover, for holiday resorts, they got low switching costs of suppliers. Suppliers don’t need to provide the certain types of products or services. Such as construction and equipments, they are ordinary supplies which are easy to find appropriate suppliers. We get the power to decide which supplier will be chosen once more. Who have the high quality, good service, guarantee just-in-time delivery will be selected as suppliers. In addition, there is a low threat of forward integration for holiday resorts. As our suppliers have low concentration, and they are not specific. They have low possibility to integrate forward to develop the new business in industry of holiday resorts. With the low of bargaining power of suppliers, it is difficult to enter this industry.
Intensity of Rivalry Intensity of rivalry is low. The rise and development of the holiday resort industry only is phenomenon in recent years, and it is the product of the development of tourism industry. In recent years, there are low barriers to enter the industry and a wide range of competitors. Family holiday resort is the increasing in the same area, and they use the low price with almost the same product or service to make attract more customers. User switching cost is very low and customers easily swayed, but this method is only for a short period of time. Exiting barriers higher, to withdraw from the competition, has higher cost than continuing to compete. Barriers to exit are mainly affected by economic, strategic, emotional, social and political relations. The competitions between the large holiday resorts make the level of competition get higher. Price competition is gradually turning to the high level of culture and brand competition. With high cultural taste, it appears the distinct individuality and characteristics, high visibility and high quality brand; the holiday resort will be favored by the customers. For example, RGHCM Holiday Resort uses the computer as the representative of the advanced science and technology to improve work efficiency and service quality in the operation, management and service, and maximizes meet the diverse needs of the guests.（RGHCM Holiday Resort, 2012）Every enterprise of the industry must deal with all kinds of threats, and enterprises will face every competition act in the industry, unless the confrontation is necessary and beneficial to go do that. For example, for a large share of the market, the enterprise can be set the barriers, differentiation and switching cost to protect them own. When an enterprise determines their industry advantages and disadvantages, it must undertake locating. So in the light of its general trend, and it is not to be expected that damage change of environmental factors, such as the product life cycle and industry growth rate, and then protect themselves and ready to effectively response to other enterprise. To sum up, this industry is attractive when five forces analyze together. It's easy to enter holiday resort industry.
Key Success Factors
KSF Competitors Holiday Resort industry also needs to have key success factors, so as to succeed. First of the key success factors is good environment. People can see much plant and rivers so that people return to nature and relax themselves. Second of the key success factors is surroundings. When people enjoy good lives, they also come to scenic spots, like historical sites, and people don’t spend other time to go. Third of the key success factors is offering good service. People enjoy the advanced recreational equipment, indoor and outdoor entertainment items and considerate service, which attract many customers to come again and new customers. Forth of the key success factors is unit cost. The key is that using low unit cost provides good things for customers and makes customers spend less money in enjoying good time. At last, accommodation is the key success factor. People like the cheap, comfortable and characteristic accommodation.
Competitive KSF Analysis Table In China, the old saying shows that "knowing oneself and one's enemy ensures victory". That why we do the competitive KSF analysis. This type of analysis requires evaluating the strength or competency of each firm on each of the KSFs. When talking about the KSF of the Holiday resort, the first of all KSFs is service that offers to the customers. Table-1 shows us the performance of each firm in a direct way. The number "1" means the best and "4" means the worst. The product of the holiday resort is high-quality and distinctive service. They should make their customers feel comfortable and happy. We can see that the TaoYuan Resort is a five-star hotel which provides the Private Wine Cellar, and it includes the Saddle Club. It can offer the customized service for different level of people. ("The view of Taoyuan Resort", 2012) The Xiedao Holiday Eco-farm is a place for people to enjoy the freestyle life. So it just provides the helpful and necessary service and let the customers enjoy their own time. (xiedao.com, 2012) Furthermore the accommodation an important for a holiday Resort. The Taoyuan Resort offers different types of house, and all of them are large, clean and well decorated. Second, we should pay attention to is the environment around the holiday Resort. Both the natural environment and the traffic should be considered. Take Shajiabang Holiday Resort as an example, it is not only nearby the developed cities and locates in the central hinge of the southeast highway, but also located in the biggest ecological wetland in the eastern China. Moreover the surroundings or the humanistic environment of the holiday resort is also the key factor for a successful business. Shajiabang is the patriotism education base and the classic red tourism scenic spots in China. It makes the Shajiabang Holiday Resort is not only a place for fun. Xiedao Holiday Eco-farm shows a part of Qing dynasty by the architectural styles. They all draw a lot of attention of the people who are interested in culture, and make themselves irreplaceable. There is another factor that we cannot ignore is the price or the unit cost. But we consider about it in a reasonable way, which means we should not judge the price before we evaluate the service, environment and other factors.
Strategy Maps We illustrated the following three maps to show the relationship and advantages among competitors. Cheerful Forest Holiday Resort occupied 400 thousands㎡ and can get revenue 20 thousands Yuan per day. (Cheerful Forest Holiday Resort, 2012) Shajiabang Holiday Resort has a large size with 5millions ㎡ and can get revenue about 600 thousands Yuan per day. (Shajiabang Holiday Resort, 2012) Taoyuan Resort is a five- start hotel which has 163 rooms and different styles of restaurants. The biggest banquet hall can accommodate 600 people dining at the same time. The hotel also equipped with cigar bar, private cellar, swimming pool, gymnasium, hairdressing center, business center, and other function facilities, and supporting the international equestrian club and four international standard tennis venue (Taoyuan Resort, 2012). Xiedao Resort is a city-sized land. It can satisfy the integration needs of eating, housing, and play. It includes lake, farmlands, grass skill field, children' paradise and so on. (Xiedao.com, 2012) After comparing above data of four competitors, we summarize that Shajiabang Holiday Village is the biggest one among competitors; Taoyuan Resort is slightly less than Shajiabang holiday village, then Xiedao Holiday Eco-farm and Cheerful Forest Holiday Village rank in sequence. In Map-1, it can be seen that Taoyuan Resort maintain a high-cost production but with a high standard of environment. Similarly, Shajiabang Holiday Resort gets a relatively high cost. However, Xiedao Holiday Eco-farm and Cheerful Forest Holiday Resort have low cost with a low standard of environment at the same time. Those two dimensions, environment and unit cost, affect each other. Only with a high cost can create a good environment. In addition, Taoyuan Resort and Shajiabang Holiday Resort make up a strategic group because they are similar to each other on Environment and Unit Cost dimensions in this industry. Taoyuan Resort has a better environment than Shajiabang Holiday Resort but with a high unit cost. So Taoyuan Resort should take measures to cut unit cost which can get its competitive strategy. Also, in China, cost/price is a significant factor for customer considering. Therefore, Shajiabang Holiday Resort tends to take away customers from Taoyuan Resort. Map-2 shows that Shajiabang Holiday Resort has the greatest equipments but emerge a high cost. Compared with Shajiabang Holiday Resort, Taoyuan Resort has slightly less good equipments and with a less high cost. While, Xiedao Holiday Eco-farm and Cheerful Forest Holiday Resort get low cost but with a low standard of equipment. Those two dimensions, service and unit cost, affect each other. An excellent service will produce a high cost. Similarly to Map-1, Taoyuan Resort and Shajiabang Holiday Resort make up a strategic group because they are similar to each other on Service and Unit Cost dimensions in this industry. Shajiabang Holiday Resort has a better service than Taoyuan Resort but with a high unit cost. Different consumers have different consumption tendency. Rich consumers pay attention to good service much. Ordinary customers in China will highly regard cost/price much. All in all, Taoyuan Resort and Shajiabang Holiday Resort have advantage individually. Map-3 indicates that Taoyuan Resort has the best accommodation but with an ordinary surroundings. Nevertheless, Shajiabang Holiday Resort owns the best surroundings but with a moderate accommodation. In addition, Xiedao Holiday Eco-farm and Cheerful Forest Holiday Resort have commonly low accommodation and surroundings. Those two dimensions, surroundings and accommodation, affect each other more or less. Great surroundings can attract more customers to accommodate in holiday resort. Here, we choose top two competitors, Xiedao Holiday Eco-farm and Shajiabang Holiday Resort. We use resource-based analysis along with a SWOT analysis to learn the two competitors.
Resource-based Analysis Tangible resources are physical assets that people can touch, like equipment, human resources, money and etc. Intangible resources are not physical and include things having relationships with business, culture, skill and etc. The resource-based analysis is vital for companies to use their resources to formulate strategy and get competitive advantage. Analyzing Xiedao Holiday Eco-farm and Shajiabang Holiday Resort, there are five points of tangible resources and intangible resources. Some of them are ordinary resources and some of them are belong to extraordinary resources.
Xiedao Holiday Eco-farm (see Figure 2.1)
Tangible resource First, "the total building area of 2,200,000 square meters of which 90% of the land for organic ecological agricultural planting area, 10% of the land for the village service area." (Xiedao Holiday Eco-farm -Scenic overview, 2010) Although it has a certain value and superiority, it is not a rare resource, and it can be imitated and substituted. So, it is belong to an ordinary resource. The advantage of Xiedao Holiday Eco-farm is not clearly because there are many resorts which own large areas. The competitive advantage is not well. Second, it has four areas: Plantation Zone, Breeding Zone, Science Zone and Sourist Zone. (Xiedao Holiday Eco-farm -Scenic overview, 2010) It has a circulation of closed system, including garden planting, aquaculture, microbial engineering, renewable energy, water resources, agricultural products processing, sales, catering accommodation and conference on tourism industry. This is a very valuable resource and relatively rare. It’s characteristic, imitated, substituted, cannot be trade, also. This resource is an extraordinary resource. Although many resorts’ management structure is relatively simple, the four zones of Xiedao make it more diversified. In the competition, it can attract the customers, satisfy customers’ demands. Third, "the resort has two 2,400 meters deep hot spring wells, and has methane tank and sewage treatment plant to keep their recycle system."(Xiedao Holiday Eco-farm -Scenic overview, 2010) This resource can be imitated, substituted. Solar energy can substitute for marsh gas. So this is an ordinary resource. Many resorts provide beautiful environment for tourists, which cause damage to the environment at the same time. These equipments can reduce the environmental pressure and increase the competitive cost. Fourth, located in Chaoyang District of Beijing, transportation is efficient. For the imitation and substitution of this resource, it is an ordinary resource. Convenient traffic conditions make people more willing to travel here. The superior geographical position and convenient transportation are the most important factors for the resort.
Intangible resources First, honor is a significant resource of Xiedao Holiday Eco-farm. It is the Color Scheme Expert System specified green ecological garden in Beijing. The key demonstration units of industry adjust of agriculture. It can not be imitated, substituted, traded as well. This resource is an extraordinary resource. Thanks to the great resort management, the resort gains the honor resource which is recognized by the society. The honor resource also creates a good corporate image which can improve the visibility of the resort and bring more customers. Second, agricultural tourism is a scientific management mode. At present a lot of resort is to execute agricultural travel a scientific management mode. This mode of operation is a fashion trend. It is easy to be imitated, substituted. This is an ordinary resource. Third, Xiedao Holiday Eco-farm executes the concept of ecological, environmental protection, sustainable development. Now, the concept of the resort spreads as popular trends in the industry. It is easy to be imitated. Therefore, this is an ordinary resource. Agricultural ecological tourism, organic food production, processing, logistics, sales integration into the independent and perfect closed system, in the pursuit of health of modern people, the production and management in the competition to get the favor of consumers.
Shajiabang Holiday Resort (see Figure 2.2)
Tangible resources First of all, the resort is surrounded by a wealth of scenic spots. It is next to the Yang Cheng Lake and the Changshu national scenic area across the lake. The resort's establishment relies on the surrounding scenic spots. These scenic spots are unique as a result of causing the resources of the unique nature. Therefore, this is the extraordinary resource. The attractive spots can meet the needs of different consumers. The surrounding attractions also can enrich the tourists of the resort. Second of all, there are four high-speed roads surrounding the resort. The most important issue that resort establishment needs to be considered is the resources about the superior geographical position and convenient transportation. This can be imitated and substituted. So it is an ordinary resource. This can attract a lot of consumers from other cities. Next, the resort has high-class medical center. This resource is rare, can not be imitated and substituted. So this is an extraordinary resource. Many resorts have no medical facilities. This resource is relatively rare, truly caring for customer health as well. This will give the customers good image and it is easier to make customers become loyal. Then, the resort has first-class hardware facilities, include classic hardware, conference center and complete recreation facilities which are the requirements of large resorts. First-class facilities make customer Satisfied. However, this resource is not rare, can be imitated and substituted. So this is an ordinary resource. First-class facilities can improve resort levels and customers can live a comfortable life in the resort. Finally, restaurant in the resort mainly cooks Shanghai dishes. Many of the local restaurants mainly cook Shanghai dishes with more popular. It is easy to be imitated and substituted. This is the general resources. Regional things to foreign consumers are very attractive.
Intangible resources First includes time- honored histories and cultures. Cultural resources are rare, unique, can’t be imitable and substituted. So this is the extraordinary resources. "Cui Zuofu wrote nonfiction ‘Shajiabang’, describing 36 wounded behind enemy lines to the struggle." ("The Author of Shajiabang Died", 2012) This event occurred in Shajiabang. Now the Red Tourism where happens revolution is very popular in China, and Shajiabang conforms to this trend. In the competition of this industry, Shajiabang Holiday Resort has more cultural background. Second, Shajiabang also has opera culture. In Chinese history, there is a very famous opera, called "Shajiabang". This is rare, and can not be imitated and substituted. This is an extraordinary resource. "Shajiabang" is a Peking Opera and is listed as one of the model play and the red classics. It was created during the Cultural Revolution to attract old customers. Third, the resort is the three Star Tourist Hotel with independent management by the Shanghai Municipal Federation of trade unions. This is rare, inimitable and substituted. This is an extraordinary resource. The honor is the result of resort management. It is recognized by the society. Good corporate image can improve the visibility of the resort, and bring more customers. Fourth, the resort operation for a long time, it has rich experience. This is a unique, valuable resource. It can not be imitated and substituted. This is an extraordinary resource. Long time operation of the experience helps the enterprise to analyze its advantages and disadvantages. The resort is the emerging industry. Rich experience enable enterprises in the competition to occupy a favorable position. All in all, enterprises resource analysis refers to a company with future to find sources of competitive advantage, to have resource identification and evaluation process. This process includes determining a company owned resources, and then the application of resource value principle to determine which resources with real value.
Capability Analysis (see Figure 2.3) Capability is included integrated activities, organizational skills, and internally developed routines, those should be attached to extraordinary resources and it can give the company more value than other companies. Company’s capability can show itself comprehensive ability. ("Strategy", 2010)
Corporate Functions Xiedao Holiday Eco-farm’s function area has village space, enjoy entertainment place, and agricultural products trading place. These functions area give an atmosphere of village life, and have a great variety of departments, plantation zone, breeding zone, science zone and tourist zone. In tourist zone, Xiedao provides a lot of projects, including hot spring, Seaview city water park, and some facility of sport, and has some place to play video games. Resort plants these agricultural products without pesticide and offers them to customers, and customers buy these health products, because those vegetables and meet are fresh and without pollution. ("The Desing of Xiedao Holiday Eco-farm", 2012) Besides, Xiedao Holiday Eco-farm has so many function area, they also have reasonable management to manage these function area, resort arrange managers to supervise those function area, and special spatial arrangement is very creative, Resort makes a relationship between agricultural products and tourism, and makes agricultural products have a completely system about produce, process and sale, and customer also knows that Xiedao Holiday Eco-farm is very special and has healthy products. What’s more, agricultural planting is a good advertising for Xiedao Holiday Eco-farm, which makes more tourists want to visit Xiedao, those village style rooms and things like farm’s products. "Shajiabang Holiday Resort’s function areas including hotel, theater, karts circuit, water entertainment activities, golf courses, water sports center, etc. "(Shajiabang Holiday Resort, 2012) Various functions provide general service and corporate well with each other. In brief, Shajiabang Holiday Resort is an ideal place to have rest, enjoy vacation, hold meeting, do business, etc.
Research & Development In R&D, Eco-cycle is a key to resort; it is making Xiedao Holiday Eco-farm special. Resort pays attention to recycle, and makes some rubbish turn into fuel. It shows resort has high research ability, and in plantation zone, they plant vegetables and feed poultry to offer to restaurant. What's more, this point makes Xiedao Holiday Eco-farm’s product design effective and attractive. Shajiabang Holiday Resort provides internet service that customers can reserve hotel or other facilities on internet. Especially in national holidays, customers won’t worry the accommodation during the peak period if they have booked before. Shajiabang Holiday Resort always keeps up with the development of the industry. Based on the core concept of closing to nature, the resort develops the karts circuit and golf courses according to the development of the industry. (Shajiabang Holiday Resort, 2012)
Service
As a resort, service is important, and Xiedao has good condition of accommodation, they have beautiful environment and hotel is very clean and comfortable, and good service attitude, and service is very effective. Shajiabang Holiday Resort has the service design capability. In other words, the resort takes advantage of the culture of Shajiabang Opera to design the stage plays in the theater and provide visits to the Red Revolutionary Monument. According to the comments of customers who ever visited the resort, most of the customers satisfy with the superior service and Efficient in service in process of ordering and delivery. They also praise the flexibility and speed of response of the resort. For instance, Fonulc said the waiter update his room to suite for free because of few visitors at that time. (Comments of Shajiabang Holiday Resort, 2012)
Sale and distribution In sale and distribution, Xiedao Holiday Eco-farm has effective advertising and execution, quality and effectiveness of customer service, especially immediately consumption effect, it means that resort offers agricultural products and customers buy these products in resort, which can reduce the cost of transportation and promotion. Besides, this immediately consumption effect also gives customers attractive advertising, and customers know they can enjoy happy time and eat healthy food at the same time. Shajiabang Holiday Resort has several effective sales promotions, such as promising to not raise price during National Holiday, giving tickets of Expo to visitors of the resort. (Shajiabang Holiday Resort, 2012) As said above, customers satisfy with the quality and effectiveness of customer service.
Marketing
Xiedao Holiday Eco-farm has clearly advertising which healthy products and abundant entertainment projects, which leads to that Xiedao owns good reputation of quality. Xiedao Holiday Eco-farm’s marketing makes sure that more people know them. Shajiabang Holiday Resort integrates its brand which implied a famous Beijing Opera with its new services, such as visiting the Shajiabang Red Revolutionary Monument. (Shajiabang Holiday Resort, 2012) The famous opera, Shajiabang, has been emerged superior local advertising. Because of the revolutionary education bases, the area of Shajiabang has developed a good image on customers. Furthermore, Shajiabang Holiday Resort reacts to market trends efficiently, such as open golf courses which keep up with the needs of customers.
Human resource In human resource, Xiedao Resort can recruit right employees, also have effective training program to training new employees and have appropriate compensation to employees, Xiedao Holiday Eco-farm offer bus to employees when employees off duty.
Shajiabang Holiday Resort recruits right employees to serve customers with a good service feedback by customers. The resort provides good benefits, such as offering transportation to the home of employees and education of employees’ children. In those ways, they improve the involvement of employees and reduce turnover rate. ("The developing tendency of Resorts management", 2012)
SWOT Analysis (see figure 2. 4) SWOT analysis includes analysis of strengths, weaknesses, opportunities and threats. It is easy for company to understand and use its strengths to take advantage of opportunities. Besides, company avoids its threats and overcomes its weaknesses, so that it can defeat competitors. ("Strategy", 2010) Shajiabang Holiday Resort succeeds in this industry in china. They use strengths to attract many persons enjoy their lives. First, they offer customers many good recreation facilities that make sure that customers release pressures and relax themselves. In this resort, customers taste freedom rather than tension. Second, enjoying comfortable service, customers have strong feeling to try again, because they satisfy service and do not divert their attention on trifles. Third, when people relax themselves, they like places having convenient transportation. Thus, for Shajiabang Holiday Rresort is nearby the developed cities, like Shanghai and Jiangsu province. It is attractive for customers. At last, Shajiabang Holiday Resort owns beautiful environment, which makes lots of people come to feel nature. As Chinadaliy says, "With the development of economy, the environment is seriously polluted." (Chinadaliy.com, 2012) So people most like clean environment and come to this resort. However, Shajiabang Holiday Resort needs that families above middle level class can feast, due to the expensive expenses like high price about accommodation that affect its development, because this limits the source of customers. Also, Shajiabang Holiday Resort is limited to local culture. Not all people like this, because local culture may conflict with other culture so that does not satisfy other persons and has an influence on development of resort. Besides, faced with pressures, more people choose holiday resort to relax, which provides Shajiabang Holiday Resort with opportunity to develop. In addition, the development of internet business is rapid. It is vital for Shajiabang Holiday Rresort to attract many persons. People can use internet to order entrance ticket or tourist lodging to save time and money. Certainly, they can clearly know about resort by internet. Also, when Shajiabang Holiday Resort takes advantage of new energy, it can use this to cook, produce electricity, and keep warm or other fresh things. It is attractive for people to try again. Government gives priorities to develop holiday resort industry, which is an opportunity to Shajiabang Holiday Resort, because government privileges it, like decreasing tax, loan and policy support. Nevertheless, because this industry is more attractive, many competitors appear. Thus, its market share decreases and company face so much pressure that the quality of product may drop. It is the threat for Shajiabang Holiday Resort. The other threat is continual appearance of harmful food. The feature of this resort is organic food, but now much food was polluted and affects people’s health. Now, the economic development trends to globalization, so Shajiabang Holiday Resort which is limited to local culture loses lots of customers. Xiedao Holiday Eco-farm is based on the organic agriculture and combines with tourism. It gets planting, breeding, tourism, relaxation together. It has obvious strengths. First is the convenient transportation. It is located near by the Airport Expressway; people can get there by bus or car which is based on their own needs. Furthermore, the resort is next to the capital, since the capital is the place where is easy to accept the new things and lead other part of China and it offers a ready market to this company and helpful for a new company to expend the market. Second is "the unique natural resource like the hot spring gains the attractive of the resort." (xiedao.com, 2012) Third, this company advocates the green economy, and it builds an independent ecological system which can produce the food, self-sufficiency and get money by sale the surplus products. "The resort includes four parts: the plantations where people can pick in different, Breeding base on which can offer enough high meat, science parks where apply the technologies that good for environment to get clear energy, and Holiday Resort relaxing people. " (Luming, 2006) All of these facilities provide the tourists with opportunities to try the real farming life. However, the high price of Xiedao Holiday Eco-farm weakens their competitive power. The resort offers tourists the different kinds of house to choose. "The price is range 400 yuan to 1400 yuan for one night." (xiedao.com, 2012) So they lose amount of customers due to the relative high price. The feature of the resort is based on the agriculture. The bad weather condition has great effluence on the operation of the business. As the concept of the business is protecting the environment well, the company applies so many new technologies to achieve. "They build the cropland subsystem, the system of livestock farm, biogas system, and the sewage disposal system, which create large economic value without causing serious pollution." (Luming, 2006) The company cooperates with the universities and gets the technical support to perfect its independent ecological system. The development of technology is an opportunity for the resort. It helps the government resolve the problem of employment by offer a lot of work opportunities to the rural labor, and make primary contribution to the city's income and tax revenue.(Yangliqiong, 2011) The government rewards it as the model of modern agriculture, and gives it the support as much as possible. If the government gives political/legal support to develop holiday resort industry and strengthens infrastructure construction, the company has great opportunities to expand the business. Furthermore, the business model is new to the public and the income of people has increased, it still has the broad space for development. This holiday resort has some threats. First of all, due to large the scale of the resort, it is necessary to handle the effective way to manage the business. Each link of the business should pay full attention to make sure that it runs well. Second, the cash flow of the business also needs to pay attention. To such a large scale of business, the risk reinvestment is high. So every decision is needed to be considered really and carefully before making. At last, the external threaten of the company is the competitors in this industry, because their different service also can attract a part of customers. Company should have plans and strategies to make it be successful which is key to company’s development. Next, we will discuss strategies we can use and recommendation of suitable strategy.
Strategic Options
Horizontal diversification Our first strategic option is horizontal diversification with market fit. "Horizontal diversification means acquisition of a company that operates in the same industry using the same value chain."("Strategy", P296) Using horizontal diversification strategy, we will enter a new business in same industry and use same value chain. In this way, our company will enhance the market power. Ideal Kingdom is kind of resort, it is same as Xiedao Resort and Shajiabang Holiday Resort. However, our company belongs to the same industry and has same value chain; we also learn those resorts experience which can help our company’s growth. Our company can make resort more detailed and deep, like making our own departments to attract customers as well. This is a point to us that we should enhance the market power because we must advertise ourselves, and make more customers know our company. The synergy of horizontal diversification derives from the market fit that need us to broaden the scope, extend our business in service, advertising, and products. In this way, gaining more market power can bring us more opportunities which can make our business bigger. In addition, market power can generate more market share. As a result, not only can it make our company more profits, but also make more people know the characteristics of Ideal Kingdom and our departments including Agritourism, Health Club, Cartoon Themes Park and Water Parks will be advertised quickly. Although horizontal diversification strategy has many advantages, there are some vital cons that we can’t ignore. Using horizontal diversification strategy, we will operate the same value chain in the same industry of holiday resort. On one hand, the resort using the same value chain will attract the same specific group of customers which will not develop the customer segments resulting in a narrow market scope. As a result, there is a barrier to acquire some segments of customers. On the other hand, after we gain the market power, there will be much imitation in the industry. Other competitors may follow us to operate the same value chain in our industry. Then, our strategic advantages will not make a difference. We must consider carefully before we choose our corporate strategy.
Vertical diversification Our second strategic option is vertical diversification with management fit. By definition, "the vertical diversification is entering the new businesses in the same industry but occupy different positions up or down the value chain."("Strategy", P297) To a resort, the quality of the service and the customer experience they offer is the most important part in their business. As a part of the value chain, a company should try to control most of the links of the chain and manage them effectively. The vertical diversification is a way to enhance the power of control and operation of our business by gaining the control over the value chain. In the value chain, the resort is always a buyer who needs so many resources like food, equipments, water and electricity. Therefore, it may not have enough power to bargain. Take Xiedao resort as an example, it has their own farm where grow the vegetables and provide meat to itself. It makes the resort has less suppliers and enforce their bargaining power as a buyer. At another hand, they can sufficiently and timely supply the food with stable quality. (xiedao.com, 2010) It also applies to our resort that is why we also build the farm to grow our own plant. The farm also expands another business to offer the customers an experience to be farmers which gain the profits at the same time. Furthermore, we build the solar-powered house and the windmills can make the electricity in order to reduce the dependency to the suppliers. The vertical diversification strategy makes the whole business more cohesive and powerful. As the core to control the whole business, the management fit plays an important role in this vertical diversification strategy by making the plan, organizing the structure, and ensuring the performance. This independent organization can make sure all the parts of the business accomplish on their behalf with the same objective and motivation. The company can get the benefits according to use the vertical diversification. Meanwhile, we can't ignore the disadvantage of the diversification. Now, there are so many holiday villages in the market, our company is a new company, we are just freshman. There are some barriers for us to pursue the vertical diversification strategy. One of them is that the vertical diversification requires the company investing much money in innovation. As a new company, we may have limited money and energy to invest and manage. It is very dangerous for a new company. Every company has their ideas to attract the customers. If there is a perfect idea, other company will copy it quickly. So it may be different for our company to make sure that the program is worth to spend much money. The vertical diversification needs to change to fit our company. If our company need to change but having risks, I think it need us to think twice and well plan before we use the strategy. All we do is to satisfy the customer's needs, but we can't make sure the customer can accept the new thing.
Recommendation
Our company prefers to choose vertical diversification strategy with management fit for the following reasons. We can extend our value chain to gain more control over this industry. For instance, we develop our own supply chain of food, equipments, water and electricity resulting in the low bargaining power of suppliers as well. In this way, our company can exerts plans to satisfy our customers according to the needs of them which will not be restrict by what our suppliers offer to us. The management fit will make synergy with the strategy. We will make the plan, organize the structure, and ensure the performance to guarantee we choose the most suitable strategy for our company.
Company Introduction Our company is named Ideal Kingdom and occupies 3millions ㎡ and has four areas which include Argritourism, Health Club, Cartoon Themes Park and Water Parks. Besides, the design of our company is fit for various generations of people. People can enjoy relaxing, healthy and happy life here. Our mission is, "We strive to increase our profits based on satisfying customers’ demands and making them enjoy comfortable service." Because customers can advertise our company when they enjoy comfortable service and taste good atmosphere, this not only keeps old customers and attracts new customers but also increases more profits. Our vision is, "We make our company become number one of Holiday Resort industry in China." This motives employees to work hard and offer customers considerate service. We will make efforts to realize our vision for a long term in the end. Our company is located in Xinzheng suburbs. Because Xinzheng has airport and is closed to train station of Zhengzhou which is core hinge of China, it is convenient for customers to come. Besides, suburban district in Xinzheng, has more trees than other districts, so our company is surrounded by many trees and show relaxing and healthy feelings to customers.
Implementation
First, in Argritourism area, we provide pastoral food for customers. With the development of economical technology, much food was dealt by pesticide and they lose their own taste. But our food fully come from peasant family and natural and safe food. Besides, we have professional nutritionists to assign food. Due to that Xinzheng abounds with dates, customers can experience date garden and enjoy eating dates from trees by themselves. Argritourism area has a natural river, so customers can go fishing. Second, our company sets up Health Club. When they go holiday here, they can do health care, hairdressing, spa, body care and traditional Chinese medical massage. At last, in order to attract more people, like students and children, our company also builds Cartoon Themes Park and Water Parks. In Cartoon Themes Park, all scenes are designed by cartoon features, such as cartoon KTV. In addition, Cartoon Themes Park has animation stage in every Saturday. Thus, customers can cosplay their favorite roles. The important thing is that there are very hot and new cartoons without any restriction, customers can freely watch. In Water Parks area, customers can see the common facilities, such as Water Slide, Pirate Ship and Brave Road. They can feel breath of water and wind. Certainly, our company assigns professional lifesavers to avoid having an accident. In two areas, thanks to we arrange our employees to take care of children, parents don’t accompany with their children and their children can play alone. Therefore, when parents go to Health Club, they can entrust children to our employees. Therefore, we provide customers with healthy and considerate service. According to Strategy, resource allocation is key to implementation control. (P355) Our company effectively allocates our resource to fit every generation. Let customers relax themselves and experience happy lives. They never feel disappointed and indulge in pleasure and forget home. This is so different from competitors that attract a number of people and bring lots of profits to us. To sum up, we have suitable strategy for our company and also formulate detailed scheme to implement it. Based on our careful work, we believe we will achieve success.

Table-1
The rank of each firm's KSF
| |TaoYuan Resort |Xiedao Holiday Eco-farm|Cheerful Forest Holiday|Shajiabang Holiday |
| | | |resort |resort |
|Environment |1 |3 |4 |2 |
|surroundings |2 |3 |4 |1 |
|Service |2 |3 |4 |1 |
|Unit cost |1 |3 |4 |2 |
|Accommodation |1 |3 |4 |2 |

Map-1
Holiday Village Industry Strategic High T S T: Taoyuan Resort Environment S: Shajiabang Holiday Resort x X: Xiedao Holiday Eco-farm Low C C: Cheerful Forest Holiday Resort High Unit Cost Low
Map-2
Holiday Village Industry Strategic High S T T S: Shajiabang Holiday Resort Service T: Taoyuan Resort X C X: Xiedao Holiday Eco-farm Low C: Cheerful Forest Holiday Resort High unit cost Low

Map-3
Holiday Village Industry Strategic High T S S: Shajiabang Holiday Resort Surroundings T: Taoyuan Resort X X: Xiedao Holiday Eco-farm Low C C: Cheerful Forest Holiday Resort High Accommodation Low
Figure 2.1
|Xiedao Holiday Eco-farm’s Resources |
| Tangible | Intangible |
|The total building area of 2200000 square meter. |1. It is the CSES specified green ecological garden in Beijing. |
|.It has four parks: Plantation Park, Breeding Park, Science Park |The key demonstration units of industry adjust of agriculture. |
|and Tourist Park. |2. Agricultural tourism is a scientific management mode. |
|3.It has two 2400 meters deep hot spring wells, methane tank and |3. The idea of ecological, environment and sustainable |
|sewage treatment plant. |development. |
|4.Located in Chaoyang District Beijing, transport is efficient. |. |

Figure 2.2
|Shajiabang Holiday Resort’s Resources |
| Tangible | Intangible |
|Wealth of scenic spots. |1. Time- honored histories and cultures. |
|The junction of four high speed way. |2. The attractive opera culture. |
|High profile medical center. |3. Managed by Shanghai General Chamber of Commerce. |
|Classic hardware, conference center and recreation facilities are |4. Operation for a long time, rich experience. |
|complete. | |
|5.The taste of Shanghai dishes | |

Figure 2.3
| Capabilities |
|Functional area |Xiedao Holiday Eco-farm’s Capabilities |Shajiabang Holiday Resort’s Capabilities |
|Corporate Functions |All kinds of divisions with perfect |Various divisions with perfect cooperation of each |
| |cooperation of each other |other |
| |Abundant entertainment activities |General service management |
| |Reasonable management | |
| |Special land function allocation scheme | |
|Research & Development |High research ability |Internet service |
| |Use Eco-cycle and protect the environment |Speed of service development |
|Service |Effective and attractive design of service |Service design capability |
| |Good condition of accommodation |Efficiency in service delivery and order processing |
| |Superior service |Flexibility and speed of response |
| |effective | |
|Sales and distribution |Effective advertise and execution |Effective sales promotion and execution |
| |Quality and effectiveness of customer |Quality and effectiveness of customer service |
| |service | |
| |Immediately consumption effect | |
|Marketing |Effective advertising |Brand leverage to new service |
| |Reputation for quality |Superior local opera advertising |
| | |Great image through revolutionary education bases |
| | |Reaction to market trends |
|Human resource |Recruit right employees |Improve the involvement of employees |
| |Effective training program |Recruit right employees |
| |Appropriate compensation |Provide good benefits |
| | |Reduce turnover rate |

Figure 2.4
|Competitors |Shajiabang Holiday Resort |Xiedao Holiday Eco-farm |
| | | |
|SWOT | | |
|Strengths |Many good recreation facilities. |The convenient transportation |
| |Comfortable service. |The good location |
| |Location that is nearby the developed |The natural resources |
| |cities. |The its own vivid characteristics |
| |Good reputation |Many recreational facilities |
| |Attractive environment | |
|Weaknesses |The high price about accommodation |The relatively high price |
| |Limited to local culture |Rely on weather condition |
|Opportunities |Rising rate in people enjoying lives. |Government support |
| |Development of internet business |Technical cooperation with scientific |
| |Much new energy |institution |
| |Government gives priorities to holiday |Lead the new trend |
| |resort industry |The income of people have increased |
|Threats |Growth of competitors |The scale is too large to manage |
| |Continual appearance of harmful food |The cash flow |
| |Globalization tendency |So many other resorts |

References
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