Last Updated 13 Apr 2020

Banyan Tree

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Competitive strategy From the outset, the objective of Banyan Tree brand-building was to create a sustainable platform upon which to grow - even if cheaper competitors and similar concepts stepped into their space. However, after owner, Ho Kwon Ping did his survey on corporate landscape before the success of Banyan Tree, harsh conclusion that his businesses were not sustainable. Banyan Tree needed a proprietary advantage to counter cost pressures. It could be a patented invention, but they were not technologically inclined.

So the alternative Banyan Tree came up with, was to build a consumer brand which had to be not only sustainable, not only in Asia, but in a globalised marketplace. If Banyan Tree is to survive in a global marketplace - and hospitality is perhaps one of the most global, because high-end tourists can easily choose between say, Portugal or Phuket, Greenland or Greece - they must be able to be among the best of breed, not only in their own backyard but in whatever markets their customers will go to.

Their strategy was the only way they could be a price-maker and not a price-taker. Any enterprise, even with innovations, can only set its own price until cheaper competitors emerge. In Banyan Tree’s case, innovative features - such as pool villas and tropical spa pavilions - are no longer a monopoly for them. If imitation is the most sincere form of flattery, they can take solace in being flattered.

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But, with competitors emerging, the only way they can remain above price wars is to leverage the brand to generate a price premium and customer loyalty. Branding makes a tremendous difference in creating competitive advantage. Much of their decision-making regarding a new venture is determined by its impact on their branding. This imperative for survival, rather than vision for success, is the fundamental driving force behind Banyan Tree, against their competitors.

Banyan Tree essay

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