When we talk about strategic planning in business, many people think of a one-off event where the team meets, creates a strategic plan, and then everyone sits back and watches the plan deliver success into the future.
Unfortunately there are very few ‘silver bullets’ in business, and strategic planning is no exception.
Effective strategic planning is an ongoing process in which the senior team evaluates and responds to current and forecast business conditions, and creates plans that allow the business to take advantage of opportunities and minimise risks. It requires vision, research, foresight and a game plan that takes account of the many competing factors in a business’s target market.
Western Sydney is an environment in which businesses need to be particularly agile and responsive in their strategic planning. There is so much going on!
Just look at the accommodation and hospitality sector. There are multiple factors currently impacting accommodation firms’ forward plans, including tight rental markets, competing guest demand, drivers from government infrastructure spending, major sporting and entertainment events, residential and commercial construction projects and more.
These factors have been front of mind for the team behind Value Suites Penrith, an independent apartment hotel located in Emu Plains.
Strategic planning case study: Value Suites Penrith
General manager Barry Koch is overseeing the rollout of his employer's strategic vision for their Penrith hotel.
With Building A opening in 2014, Building B in 2018 and Building C due in April 2024, the 107-room Penrith development has been carefully staged over the past decade.
An independent hotel business, Value Suites has locations in Penrith and Green Square, with a third in development at Parramatta. It's owned by a group of Sydney businessmen, comprising a hands-on managing partner plus investing partners.
“Our managing owner is a bit of a visionary,” Barry says.
“He could see the market in Penrith was placed to grow. He had the forethought to buy a sizeable piece of land and get the whole project approved at the same time. He opened the first building, gauged demand and then proceeded with Building B, and now Building C.
Building A comprises 43 traditional hotel-style suites, Building B is a mix of 24 hotel-style suites and serviced apartments, and Building C will consist of 40 studio suites with cooking facilities.
The hotel caters to a wide range of guests including long-stay commercial guests, visitors for sport and leisure activities, health service patients and their families, and government clients.
“A lot of our recent success has been driven by the construction boom in Western Sydney. That has cemented the plan for Building C to consist of studios with cooking facilities,” Barry says.
“We had an industrial business from Newcastle who started out booking five rooms for five weeks. They ended up averaging about 10 rooms a week and stayed for more than six months. One week, during the peak of their project, they had 25 rooms.
“Companies in that sort of situation, with people staying long-term, really like to be able to offer their employees the option of cooking facilities.”
From a strategic perspective, Barry says the goal is for Building C to target the construction sector and other people looking for long-term accommodation.
“With the success of Building B, the owners feel confident we’ll be able to make a success of Building C, especially because we’re not just relying on construction of the airport,” he says.
“Penrith is the closest major suburb to the airport and once it opens this area will be a gateway for visitors.
“Plus there’s all the other infrastructure construction going on out here and, in more recent times, the rental shortage driving serviced apartment demand.”
My 5 top tips for strategic planning
A good strategic plan is not about the size of the document, or how bold the growth and development plan might be. Rather, a good strategic plan has the following elements:
- A vision that is well defined. Ask yourself: ‘Looking out to 3/5/10 years, where do we want to be and what will that look like?’
- Robust research on your target market sector. Ask yourself: ‘What are the opportunities and risks in this market? What are the demand drivers for clients and suppliers? What regulatory factors and competitive dynamics are going to shape our market?’
- A well-founded strategy that positions the business with a strong point of difference and competitive advantage, while taking account of the vision and the external market drivers.
- A road map and implementation plan with well-defined priorities and targets. It needs to answer: ‘What do we need to do first? How do we measure success? What comes next? If risks arise, how should we respond?’ The Value Suites case study provides a great example of an incremental plan that delivers on the investment in a staged way that is operationally and financially sustainable.
- Strong and dynamic management and oversight over the plan period, to maximise the outcomes and also react to and address any variations or changes. Strategic plans aren’t one dimensional; they always require refinement and changes to ensure the best outcome for the business and its stakeholders.
* About the author: James Price has 30 years’ experience in providing strategic, commercial and financial advice to Australian and international business clients, through his advisory, transaction and valuation firm, JPAbusiness. Follow the link to listen to the Let’s Talk Business podcast with James Price, or read the JPAbusiness blog online.