History of Moroccan and the Ritz

Moroccan history and the Ritz "The Ritz" With a goal of promoting genuine care and the finest level of comfort, The Ritz-Carlton hotel is a United States-based hospitality company. The business wants to provide its customers with the greatest personal services possible (Zairi, 1994). For this study, The Ritz-Carlton especially expanded operations in Morocco throughout the Middle East and Africa. The strengths study of the Ritz hotel in Morocco is as follows. It is a fantastic brand that is well-known throughout the world, to start. About 6400 homes are available worldwide, spread across 125 different nations. Additionally, there are roughly 100 million repeat customers. In terms of vulnerabilities, there is fierce rivalry from well-known hotel chains and a large number of entries into the market. However, opportunities include developing markets, invention and innovation in customer services as well as the acquisition of other hotels and properties. There is also tourism support from government thereby giving room for remarkable performance of Ritz in Morocco. Primary threats include open competition especially on pricing and variable changing exchange rates (Zairi, 1994).

Morocco

Geography

Morocco is a country situated in North West of Africa. The capital city of Morocco is Rabat. It is the only African country that is privileged to access both the Mediterranean Sea, that is, to the North and Atlantic Ocean coastlines to the West. The general interior and Northern coast landscape of Morocco is mountainous with Atlas Mountain occupying the central section of the country (Miller, 2013). The Sahara Desert covers a significant portion of the country's southeastern part of Morocco. The country experiences majorly Mediterranean, moderate to a subtropical type of a climate. This climate makes Morocco a traveler’s destinations hub. Morocco is also bound by international agreements to protect the environment. Such agreements are party to bio-ecosystem, climate changes, protection of Ozone layer and minimized desertification.

History

Morocco gained their independence on 2nd March 1956. The country exercises a constitutional monarchy with parliamentarians who are elected by citizens. The nation also has a pronounced executive, judicial and legislative powers (Willis, 1999). The King, who rules the country, is entrusted with majority of the executive and legislative powers. Morocco is split up into 11 administrative districts which are governed by ‘walis'(governors) chosen by monarch (Willis, 1999). King Mohammed VI came to power on July 23rd, 1999 after the demise of King Hassan II, who was his father. The current prime minister of Morocco is Saad Eddine El-Othmani.

Demographics

The total population in Morocco as at July 2006 was 33.9 million people. Morocco's official language Moroccan standard Arabic. Arabic is the universal language taught in schools and adapted to carry out businesses. It is also the primary language used in government offices, services and learning institutions. Berber has also been recognized as an official language in Morocco in their constitution (Miller, 2013). The dialect has been advocated to be taught in Moroccan schools. Morocco consists of two major ethnic groups' constituting 99 percent of the population, namely; Arabs and Berber. The latter is the native people of Morocco. Other ethnic groups living in Morocco include Gnawa, Europeans the Jews. In as much as the majority of Moroccans are Muslims, the population smoothly coexists and interacts peacefully. 99 percent of the population are Sunni Muslims of Arab in religion and the minority one percent being Jewish. Morocco experience a growing population, though ageing. The life expectancy for women is 74.3 years and 69 years for men. The illiteracy levels in Morocco stands at 31.5 percent with 16 years of study which is relatively lower compared to the United States (16.5 years). The country spends 5.4 percent of the Gross Domestic Product on education that is similar to the percent spent by the United States (Miller, 2014).

Culture

Majority of Moroccan nationals are Arabic- Berbers with Islamic being the dominant religion at 99 percent of the total population. Prayers are held five times in a single day. Morocco is known for the production of cannabis worldwide. However, the subject of legalizing Cannabis remains a discussion. A nuclear family is highly valued and crucial in Morocco (Miller, 2014). Architecture is considered a high geometric activity and an Islamic calligraphy of the Moroccan people.

Market Analysis

Economy

According to 2016 Gross Domestic Product, Morrocan population’s purchasing power stood at $284.1 billion. The accepted official exchange rate was $ 103.6. The income per person in Morocco is $8200. Additionally, the Rate of economic growth is 1.2 percent down from 4.6 percent in 2015. The economic composition of Morocco comprises of; one, service industry, 56.8 percent, industrial sector 29.5 percent and agriculture 13.6 percent of the economy (Zairi, 1994). The rate of unemployment is at 9.4 percent while the section of the population that is offering active labour forces is about 11.75 million people.

Regulation

Huge investments consuming above $ 21.2 million are excused from paying import duties as well as value added tax fees. The FOMAN is a corporate upgrading fund in Morocco which aids organizations that would wish to upgrade to modern technology for efficient and effective production. Labor codes and laws discourage discrimination and advocate for equality in wages and prohibit child labour to create a regulated labor market, necessary for efficient productivity (Miller, 2013).

Banking and exchange rates regimes

There exist an extensive, reliable and trustworthy banking network systems in Morocco. The major commercial banks include, Citi Bank, German-based commerz Bank and France-origin credit Agricole Bank. The institutions offer financial instruments and financial services. In addition to sound financial institutions, credit and debit cards are acknowledged mainly as a means of transacting business in Morocco (Zairi, 1994). Elaborate networks of automated teller machines accept credit cards from various companies, for, example, Visa, AMEX and MasterCard thereby ensuring flexibility and more comfortable means of assessing funds.

Infrastructure

Good infrastructure (encompassing mainly; transport, energy and communication) to any nation is a number one ingredient in business performance and survival. Morocco is among the best-developed countries in Africa in terms of infrastructure. It has electrical connectivity across the state of about 98.9 percent. It also consumes an approximately 286000 barrels of petrol every day (Miller, 2013). Additionally, 1.4 billion cubic meters of natural gas is also consumed. Communication is also modern and elaborate in Morocco with over forty-one million cell phones. Notably, 33% people use cell phones to communicate. 55.3 percent of Morocco's population have access to the internet. It is also worth noting that, the military in Morocco consumes 3.28 percent of the Gross Domestic Product annually.

Key Trade partners

International trade grows a country business-wise by exposing it to modern technology, surplus produce, as well as acquiring what a country may not be able to generate. It also enhances specialization and foreign exchange. It mainly involves, exports and imports. The following are the major exports from Morocco; that is, electrical appliances, chemical fertilizers, fresh vegetables, fish and clothing (Miller, 2014). On the other hand, its imports constitute mostly; refined petroleum products, automobiles, wheat grains and petroleum gas. The major consumers' of Morocco's export include Spain at 23.4 %, France at 21.09% and Italy at 4.59%. Conversely, most of the Morocco's imports originate from; Spain leading with 15.7 percent, France 13.2 percent, China 9.1 percent, the United States 6.4 percent, Germany, Italy and turkey with 5.87, 5.38, and 4.39 percent respectively.

Trade Agreements

Countries come together regionally and set out business regulation and practices amongst themselves or with other nations to ease and facilitate trade amongst them. The integration proves a mutual benefit to such countries in terms of business success. Morocco is a member country with various trade agreements. Such includes, European Union, which has established a joint internal market by standardizing business laws among the member countries. The second is United State Free Trade Agreement, which has opened up demand for Morocco exports as trade barriers among the member states has been minimized. Other trade arguments that Morocco is a party to include; European Free Trade Agreement (EFTA), Turkey Free Trade Agreement, Arab Free Trade Zone and the Arab Countries Trade Agreement (Kearns, 2011).

Vision 2020

A country with a development agenda has a realistic and achievable vision indicating out the main objectives achievable in a stipulated time span. This creates a focus on where such a nation would want to be in terms of business and economically (Kearns, 2010). Morocco, looking forward to realizing economic growth has a well set out vision with a time lapse of up to 2020. The primary goals in that vision include but not limited to: sustainability and ecotourism; is achievable by first, shifting morocco to top twenty tourism hubs, secondly, developing on the outcomes of the vision 2010 and increasing new hotel bed accommodation by twenty thousand. Also, the nation purposes to realize the vision through raising number of visiting tourists by double the current amount and thrice the number of domestic trips and lastly by creating new 500,000 employment opportunities.

Requirement to start a business in morocco

Smooth, simple and clear procedures and protocols for starting a business in a country may attract or scare away investors. Morocco holds determination towards attracting investors by putting in place a simple and clear procedure and requirements for starting a business. Such include steps, processes, time limits and costs involved (Kearns, 2010). The first step is the acquisition of certificate of Availability of a company's name which costs $44.1. The second phase entails registering with the Tribunal of Commerce, taxation bodies and social security, which takes seven days and costs $492.77. The third entails making a compulsory company's stamp which is done in a day and costs $54.44. The last step involves registering employees with social security, a process that takes a day and undertaken without any charge.

Corruption Rankings

Corruption is detrimental to economic growth and development in any economy. It shifts funds from developments projects to the personal or individual consumption. Morocco was ranked position 90 out of 176 countries in 2017 in terms of corruption. The survey was done by transparency international. The corruption level is within manageable levels and can be eradicated.

Competitive Environment

Competition is an important virtue when starting a business. Competitors should be well known. Robust competing mechanisms with existing firms enable a new firm to thrive in a particular market (Zairi, 1994). Other United States companies which are in operation in Morocco include; Coca-Cola, Fan-Food, PWC and Imagination at work. However the main competitors from the field of hospitality already well established in Morocco include Sheraton international with the most significant market share 40%, Holiday Inn with a market share of 29%, Hilton Worldwide 19% and Hyatt with ten percent of the market share.

The Entry Strategy

Business strategy

A new firm should always have a way of penetrating the market and ensure constant and continuous growth, by filling an existing market gap for example, through sensitization or pricing strategies. The following business strategy could be applied by Ritz to gain a secure entry into the Moroccan hospitality industry. The firstly be executed through purchasing, developing and enhancing an already existing known property (Koslow, 1999). The second is realizable by concentrating on differentiation and initiating a high-end luxurious hotel. Additionally, establishing close relationships with the government of Morocco especially in the accomplishment of vision 2020 in tourism promotion and culture familiarity to the retarded Atlantic coastal regions is pivotal.

Acquisition costs-capital investment

Any investment requires capital. The amount of money needed depends on the magnitude of the proposed project or venture. The initial capital therefore for this investment would involve acquisition of an already existing resort at 2.5 million dollars. Cost of renovations to raise the acquired property standard to Ritz Carlton class would be 1.5 million dollars. Therefore, the total investment stands at 4 million dollars. The time frame between commencement of the investment and the start of operation will be one year, that is, January-June 2018 which is considered for meeting the legal and regulatory needs and upraising the existing firm to the Ritz standards. The duration between June-December 2018 would be an appropriate time to recruit and equip managerial, staffs and subordinate staffs' team with the relevant skills. Finally, the grand opening and starting of Morocco Ritz operations would be done on January 2019

Human resource is an integral part of an organization. Notably, well skilled and equipped employees would foster efficient business performance. The undertaking therefore, necessitates an organizational or staffing structure. At the top of the rank of the staffing structure should be, global location structure, followed downwards by nation managers and finally hotel managers. Preferably, workers should be citizens of the host country. The general staff should be picked from the host country citizens as well as from third country citizens.

Assessment and Success

Evaluation and rating of an organization on the probability of success gives room for growth and improvement of such a business (Kearns, 2010). Periodical Financial expectations for Ritz should entail developing a property already in existence to ensure quick market entry and minimize initial capital expenditure. The rate of occupation should be forecasted to rise each year progressively, by 25% each year. Moreover, to increase awareness, intense marketing costs are initially crucial.

The proforma – income statement.

The major projections are; investment payback in five years, an advanced rate of occupation, start making a profit within two years from the commencement of operation and ultimately have a sound, household Ritz brand (Kearns, 2010). The ability to expand performance and services of forms the basis of success. Such prosperity would be evident in the financial performance as indicated by firm’s income statement, revenue collected in every room available as well as Gross Operating gains per room and unsurpassable customer satisfaction.

References

Kearns, J. (2010). United States–Morocco Free Trade Agreement. Bilateral and Regional Trade Agreements, 144-191. doi:10.1017/cbo9780511575990.008

Koslow, L. (1999). Market Entry Strategies—Global Business without Leaving Home. Global Business, 186-195. doi:10.1016/b978-0-88415-753-3.50019-x

Miller, S. G. (2013). A History of Modern Morocco. doi:10.1017/cbo9781139045834

Miller, S. G. (2014). France and Spain in Morocco. A History of Modern Morocco, 88-119. doi:10.1017/cbo9781139045834.008

Willis, M. J. (1999). After Hassan: A new monarch in Morocco. Mediterranean Politics, 4(3), 115-128. doi:10.1080/13629399908414702

Zairi, M. (1994). Ritz—Carlton Hotel Co. Measuring Performance for Business Results, 261-266. doi:10.1007/978-94-011-1302-1_26