MARKETING STRATEGIES TO INCREASE COMPETITIVE POWER: EMPIRICAL RESEARCH ON HOTELS INTEGRATED WITH A MALL IN PJAEE, 17 (7) (2020) JAKARTA

MARKETING STRATEGIES TO INCREASE COMPETITIVE POWER: EMPIRICAL RESEARCH ON HOTELS INTEGRATED WITH A MALL IN JAKARTA

Hartiwi Prabowo1*, Rini Kurnia Sari*2, Teguh Sriwidadi*3

1,3 Management Department, BINUS Online Learning Bina Nusantara University, Jakarta, Indonesia 11480 2 Management Department, BINUS Business School Undergraduate Program, Bina Nusantara University Jakarta, Indonesia 11480 [email protected]; [email protected]; [email protected]

Hartiwi Prabowo, Rini Kurnia Sari, Teguh Sriwidadi: Marketing Strategies to Increase Competitive Power: Empirical Research on Hotels Integrated with a Mall in Jakarta-- Palarch’s Journal Of Archaeology Of Egypt/Egyptology 17(7), 1-14. ISSN 1567-214x

Keywords: Marketing Strategies, Competitive Power, Hotel with Mall

Abstract This research aims to examine the strategies used to increase the competitive power of hotels integrated with a mall. The object of the research includes some four star hotels that are integrated with a mall in Jakarta. The participants were general managers, directors of sales and marketing, and public relations managers. The data analysis employed IFE, EFE, SWOT, IE and QSPM to determine strategic formulation. The results from QSPM show that market penetration strategies have a greater appeal to the companies than market development and product development. This implies that the hotels integrated with a mall need to increase their competitive power through applying promotional strategies such as advertising in print and electronic media, and cooperation with third parties who have a role as influencers such as travel blogger, food bloggers, or public figures to promote the hotel.

INTRODUCTION Today’s consumers choose a hotel not only because it provides a place to stay, but also because the hotel is integrated with business centers, mall, restaurants, offices and shopping centers. Thus, hotels are facing a competition related to the fulfillment of customer needs and increased unique features. The mixed buildings offered by the hotel to consumers must have integrated facilities for life, work and shopping. There are many hotels in Jakarta which are integrated with various facilities, facilitating consumers in performing their activities. The following table present the list of hotels integrated with a mall in Jakarta.

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Table 1. Hotels Integrated with a Mall in Jakarta No. Hotel Mall 1 Hotel Indonesia Kempinski Grand Indonesia 2 Grand Hyatt 3 Sheraton Grand Hotel 4 Pullman Hotel Central Park 5 All Sedayu 6 Fairmont Hotel 7 Ritz-Carlton Pacific Place 8 Harris Suites fX Sudirman 9 Raffles Hotel Lotte Shopping Avenue 10 The Aryaduta Resort Hotel Lippo Mall Kemang 11 Hotel Ciputra Jakarta Citraland 12 Hotel Ciputra Cibubur Mall Ciputra Cibubur Resource: various sources Marketing emerges as a result of economic and business pressures, because of the need to focus on embracing a set of managerial actions to meet customer needs. The marketing evolution in the hotel industry is similar to that in other industries. The main reasons of marketing in the hotel business are due to the growing number of guests who require accommodation and increased competition by accommodation service providers. In addition, the hotel industry is becoming an increasingly mature market where competition is increasing globally and winning customers becomes a challenge. Therefore, there is a big shift in marketing. (Cooper, Fletcher, Fyall, Gilbert, & Wanhill, 2008). All hotels compete to attract consumers' attention, thus the hotel must be able to respond either offensively or defensively to these all factors that influence business by formulating strategies that can take advantage of external opportunities or opportunities or that minimise the impact of potential threats. (Sanny, Simamora, Polla, & Atipa, 2018). Strategic management is a process by which top management of an institution determines the performance and long-term orientation of the organization through collaboration at all levels of the organization (Sanny & Yuliana, 2018). This process can be implemented through a correct strategy formulation, consistent implementation and continuous evaluation (Isa, Mohammad, & Heresh, 2010). The balance between strategic strengths, weaknesses, opportunities and threats is the key used in SWOT matrix. In the decision-making stage, by using the Quantitative Strategic Planning Matrix (QSPM), identification of strategies can be done by using evaluation and assessment of objects without personal bias. (Amini, 2013). Based on such a background, then this research was conducted to find out which marketing strategies must be used by four star hotels integrated with a mall. More specifically, the research examine whether or not the marketing strategy adopted by the 4 star hotel integrated with a mall is in accordance with the potentials and opportunities in Jakarta. Then, the most appreciate strategy for increasing the competitiveness of the hotels in formulated.

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To improve the competitive power of hotels integrated with a mall, then what should be done by the hotel management. Does hotel management have to maintain existing strategies, to improve existing strategies, or change existing strategies with new ones?

LITERATURE REVIEW Hotels by Classification Hotel classification is to rank or categorize hotels based on the type of property, facilities, and amenities offered. Hotels classification is a rating of hotels, usually using nomenclature such as stars (or diamonds), with one star showing basic facilities and comfort standards and five stars showing luxury in facilities and services. The goal is to inform guests in advance about what can be expected to reduce the gap between expected and experienced facilities and service delivery. The terms rank, classification, and star rating are used to refer to the same concept for their standards and facilities. The hotel classifications can provide a useful marketing platform for each hotel and to promote the quality of their offer. Typically a four-star hotel is located strategically close to shopping and entertainment places. Customers can expect beautifully furnished rooms, restaurants, valet parking, fitness center and service room which are above average. In a five-star hotel, customers can expect luxury hotels with the highest level of personal services with so much elegance and stylish rooms equipped with quality linens, television, CD stereo, Jacuzzi tubs. There are also several restaurants on site with an extensive gourmet menu, and room service available 24/7. Strategic Marketing Planning According to David (2011) strategic management as an art and knowledge in formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its goals. Strategic marketing planning is considered as a creative process striving by the management and operations teams to come up with and implement practical marketing strategies that can guarantee a stable flow of business for the company. According to Kotler and Keller (2012), in designing strategy one of the most important things that the management needs to implement is the grouping and application of the STP (segmentation, targeting, and positioning) concept. - Segmentation is a process of dividing the market into groups of customers who have the same behavior or similar needs. - Targeting is to evaluate which market segments the company targets. - Positioning is an action to design offers and an imagery company in order to get a special place in mind in the circle market target.

IFE and EFE Matrix IFE matrix is used to find out the company's internal factors regarding the strengths and weaknesses that are considered important. Meanwhile, the EFE Matrix allows strategists to encapsulate and evaluate economic, social, demographic, political, political, government, legal, technological and environmental factors (Sumiarsih, 2018).

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The consequence of the considerable number of investigations as interior condition examination of qualities (S) and shortcoming of association (W) is presented in IFE lattice table 2. Internal data and information can be extracted from some functional companies, such as aspect of management, production / operations, human resources, marketing, finance, and information systems. (Umar, 2008). SWOT Methods and techniques for analyzing strategic items in strategic management processes and SWOT are the most common methods of evaluating strengths, weaknesses, opportunities, and threats. (Motefaker, Mohammad, Hassani, & Saburi, 2013). SWOT analysis could also be applied for identifying and solving problems because SWOT analysis has been widely used in business management (Nagara, Lam, Lee, Othman, & Shaaban, 2015). The SWOT matrix describes various strategic alternatives derived from a comprehensive review of factors from internal and external environments, which produce 4 possible strategies: (Dyson, 2003; Mooney, 2001). 1. SO strategy is a strategy for using strengths by taking advantages of opportunities. 2. WO strategy is a strategy for minimizing weaknesses by taking advantage of opportunities. 3. ST strategy is a strategy for using strengths for overcoming threats. 4. WT strategy is a strategy for minimizing weaknesses and avoiding threats. QSPM QSPM is intended to decide the relative engaging quality of variable elective procedures by analyzing the basic internal and external components. Conceptually, QSPM decides the relative allure of various methodologies in light of the degree to which selected techniques will gain by qualities, opportunities, settled shortcoming, and decreased dangers (Ommani, 2011). QSPM is an apparatus that enables techniques to assess elective systems impartially, in light of already recognized key inward and outside sources factors. Similar to other systematic instruments of methodology definition, QSPM requires great instinctive judgments.

Research Framework Analytical analysis includes: (1) Internal Factor Evaluation Analysis. (2) External Factor Evaluation Analysis, (3) SWOT Analysis, and (4) QSPM Analysis.

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Figure 1. Research Framework The objectives of this paper are (1) to identify and evaluate internal and external factors, (2) to formulate an alternative strategy for business development program, and (3) to provide effective recommendations.

SWOT Factors Alternative Goal R S1 S2 S3 S4 A1 e S5 S6 S7 c W1 W2 W3 A2 o W4 W5 W6 m O1 O2 Q3 O4 A3 e O5 n T1 T2 T3 T4 . d T5 a . t i o An n Figure 2. Model for decision-making MATERIALS AND METHODS This research was conducted to see the strategy used to increase competitive power in hotels that integrated with a mall. This study, will describe and interpret facts obtained from the object of research with the aim of identifying the marketing strategy in order to improve competitiveness. The object of the research is some four-star hotels that are integrated with a mall in Jakarta. The participants were general managers, directors of sales and marketing, and public relations managers. The data of the study were obtained from several parties directly involved in the planning and decision of corporate strategies. One way that can be used to determine the condition of a company is to identify the internal environment and external environment of the company. For identifying the company's internal and external environments (strengths, weaknesses, opportunities and threats), the authors conducted direct interviews with the directors of sales and marketing. The interview results were then analyzed so that the authors obtained research data on the internal and external environments of the hotel.

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RESULTS AND DISCUSSIONS IFE Matrix and EFE Matrix IFE (Internal Factor Evaluation) and EFE (External Factor Evaluation) were used to identify qualities, shortcomings, openings, and dangers. The data needed to determine the weighting of the company's internal factors were obtained using a questionnaire known as the Analytical Hierarchy Process (AHP) questionnaire. The data were then processed and inputted into Expert Choice 2000 program, to determine the weight of each internal factor of the company. This process is also called pairwise numerical comparison, or numerical pairwise comparisons. After all scores of interest were entered and processed, the results of each respondent were calculated manually for averages in which the average of the results is the determinant of the weight of each internal factor. Rating 1 to 4 on each factor indicates that the factor is very weak (rating 1), weak (rating 2), strong (rating 3), (very strong (rating 4). The weakness obtained rank 1 or 2, while the power obtained ranked 3 or 4. So, the ratings are based on the company, while the weights are industry-based. The consequence of the considerable number of investigations as interior condition examination of qualities (S) and shortcomings (W) are presented in IFE network in table 2: Table 2. Matrix Internal Factor Evaluation (IFE) Factors Weig Ratin Score ht g Weig ht Strength 1. Strategic location has an accessible 0.173 4 0.692 highway access. 2. The location blends with the mall. 0.106 4 0.424 3. Interior design of the building and the 0.019 3 0.057 rooms are modern and minimalist. 4. Supported by standard facilities of four 0.039 4 0.156 star hotels. 5. Equipped with pool facilities located on the 0.018 4 0.072 top floor 6. Managed by international standard hotel 0.04 4 0.160 management and owned by one of the leading developer groups in Indonesia. 7. Good and positive imagery in the national 0.058 4 0.232 and international world. Weakness 1. Limited parking space 0.097 1 0.097 2. Limited number of rooms 0.063 1 0.063 3. Limited meeting room capacity. 0.068 2 0.136 4. The condition of the rooms and meeting 0.114 2 0.228 rooms are less soundproof. 5. Promotional facilities that rely solely on 0.119 2 0.238 distributing brochures through sales person and social media hotel.

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6. Not surrounded by entertainment venues. 0.086 2 0.172 Total 1 2.727

The results of the analyses of opportunities (O) and threats (T) of hotel are presented in EFE matrix in table 3: Table 3. Matrix External Factor Evaluation (EFE) Factors Weight Rating Score Weight Opportunities 1. Opportunities to gain business 0.132 4 0.528 opportunities and clients from industrial estates and factories 2. Potential for MICE business opportunities 0.039 3 0.117 3. Opportunities to get Social Event business 0.066 2 0.132 opportunity from some housing with middle economic class up. 4. Opportunities to gain business potential by 0.022 4 0.088 utilizing hotel support facilities. 5. The existence of additional infrastructure 0.044 4 0.176 development around the hotel, such as the construction of toll roads that will impact on the increase of visitors who pass through the hotel area. Threat 1. Traffic congestion around access road to 0.075 2 0.150 hotel at certain times. 2. Will be built several star hotels located in 0.04 3 0.12 the same location 3. Competitive and more attractive meeting 0.328 3 0.984 and room rates offered by competitors 4. Decrease of budget allocation from 0.14 3 0.42 government segment to carry out MICE activities in hotel. 5. Surrounded by several restaurants located 0.114 3 0.342 in the mall building. Total 1 3.057

The total score is 2.533 (table 2) indicating a strong internal position and the total score is 3.045 (table 3) indicating a strong external position. The Internal – External (IE) Matrix IE (Internal-External) matrix presented the various divisions of an organization in nine cell views. The total IFE weight score is on the x axis. On the x-axis of the IE Matrix, a total IFE weight score of 1.0 to 1.99 indicates a weak internal position; a score of 2.0 to 2.99 is considered moderate; and a score of 3.0 to 4.0 is strong. IE matrix can be divided into three main sections that have different strategy implications. First, the divisions belonging to cells I, II, or IV can be

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described as grow and build. Intensive strategies (market penetration, market development, and product development) or integration (backward integration, forward integration, and horizontal integration) are appropriate for these divisions. Second, divisions in cell III, V, or VII can be handled properly through a strategy of holding and maintaining; market penetration and product development are the two most widely used strategies in this type of division. Third, the general provisions for divisions entered in cell VI, VIII, or IX are harvest or divest. Successful organizations are able to achieve a portfolio of incoming or in-cell businesses within the IE Matrix. (David and David, 2013).

Figure 3. The Internal – External (IE) Matrix Resources: David (2013) Based on the analysis of external and internal factors summarized in the EFE and IFE matrix, IE Matrix can be compiled by matching the scores on both matrices. The IE matrix comparison generated EFE: IFE = 3.057: 2.727 in high cells EFE and average cells IFE. This implies that the hotels integrated with a mall needs to increase competitive strategies through EFE and maintaining strategies through IFE. IFE weight score is 2.727 and EFE weight score is 3.057 included in cell II. So it can be handled properly through a strategy of grow and build by using intensive strategies or integration strategies. Intensive strategies consist of market penetration, market development, and product development. On the other hand, incentive strategies consist of backward integration, forward integration, and horizontal integration. SWOT Matrix A SWOT matrix is a tool used to define a strategy that companies will use through matching the major external and internal factors: SO strategy (strengths-opportunities), WO strategy (weaknesses-opportunities), ST strategy (strengths-threats) and WT strategy (weaknesses-threats) (David, 2011). In general, organizations will run WO, ST, or WT strategies to achieve a situation where they can implement the SO Strategy. If a company has a big weakness, the company will struggle to overcome it and turn it into strength.

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WO strategy has the goal of improving internal weaknesses by taking advantage of external opportunities. Sometimes, great opportunities arise, but companies have internal weaknesses that prevent them from taking advantage of them. ST techniques use the intensity of an organization to maintain a strategic distance from or decrease the effect of outer dangers. This does not mean that a strong organization must always face threats directly in the external environment. WT technique is a guarded strategy for diminishing inward shortcoming and keeping away from outer dangers. An organization that faces various external threats and internal weaknesses is in a dangerous position. Such a company may have to struggle to survive, merge, shrink, and declare bankruptcy or option for liquidation. The results of the SWOT analysis are presented in the following matrix.

Table 4. Matrix SWOT EFE IFE Strengths (S) Weakness (W) Opportunities (O) Creating an attractive Utilizing hotel facilities promotional program for additional meeting for every target market places. that is around the hotel by maximizing existing facilities. Creating a mutually Adding promotional beneficial program of media especially to the cooperation between the surrounding area which hotel and the mall to add has business potential. value Threats (T) Utilizing the existing Creating a facilities to be used as an soundproofing project attractive product sales for the addition of package. soundproof material both in the room and meeting area Utilizing brand image to Creating competitive create promotions and and flexible promo add preferences to packages customers

Quantitative Strategic Planning Matrix (QSPM) Quantitative Strategy Planning Matrix (QSM) is utilized to decide the most fitting elective systems that can be connected to the organization. Alternative strategies include market penetration strategies, market development strategies and product development strategies. David, David, and David (2016), conducted research indicating that QSPM is very useful both in theory and practice in the effectiveness of marketing strategy. Total attractiveness score must be given to each strategy to show the relative attractiveness of one strategy over another, taking into account

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certain factors. The range of total attractiveness score is 1 = no attraction, 2 = low attraction, 3 = medium attraction, and 4 = high attraction. Table 5. Quantitative Strategic Planning Matrix (QSPM) Strategy Market Market Product Penetration Development Development Total 6.537 6.388 5.788 Attractiveness Score

Based on the result of Quantitative Strategic Planning Matrix (QSPM) it can be seen that the market penetration strategy obtain a high total attractiveness score, 6.537. The other two strategies, which are the market development strategy and product development strategy obtained scores of 6.388 and 5.788 respectively. So, companies must use market penetration strategy to maintain or improve products already owned by the companies in the target market that has been formed. The application of market penetration strategy will be more effective if accompanied with the implementation of a more intense market mix strategy. Research conducted by Permatasari (2015), showed that from the ten alternative strategies, there is one main alternative strategy that can be chosen by a company to run first, which is cooperating with various travel agents, selling religious tour package for attracting enthusiastic entourage Sunan Ampel to stay at Quds Royal with a total attractiveness score of 6.2023. The results of this study are in line with the research done by Bunge Geraldine (2009), indicated that the chosen business strategy is market penetration strategy. Therefore, the Grage Horizon Hotel Bengkulu should increase the company’s resources to attract consumers.

Marketing Strategy The marketing strategy to improve the competitiveness of hotels integrated with a mall in Jakarta includes: Market penetration. 1. Promotion of products offered to consumers with more aggressive promotions. 2. Applying promotional strategies with methods that have not been done by other hotels, such as advertising in print and electronic media. 3. Adding the number of sales persons to introduce the hotels products more extensively. 4. Cooperation with third parties who have a role as influencers such as travel blogger, food bloggers, or public figures to promote the hotel. Market development. 1. Improving security but still giving a priority to consumer comfort. 2. Improving the ease of access from the hotel to the mall. 3. Holding an exhibition or roadshow to increase the number of potential customers. 4. Placing sales representatives in some areas outside of Jakarta area. 5. Working with some companies to introduce products (Food and Beverage) in the company. 6. Working with travel or travel agents to gain wider market coverage.

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CONCLUSIONS Hotels integrated with a mall in Jakarta needs to improve its competitive strategy through EFE on the opportunities and threats and sustain the strategy through IFE on the strengths and weaknesses of the company In view of the aftereffects of information preparing on the Internal Factor Evaluation (IFE), the hotel obtained a score of 2.727. This esteem shows that the organization has possessed the capacity to gain the current quality so as to limit its shortcoming. Based on the results of data processing on External Factor Evaluation matrix (EFE), the hotel obtained a score of 3.057. This value indicates that the company is already successful in effectively taking advantage from its opportunities and minimizing the effects that may arise from external threats. From the Quantitative Strategic Planning Matrix (QSPM) to the Hotel, it appears that alternative market penetration strategies have a total score of 6.537 higher attractiveness compared to the other two alternative strategies, market development strategies that obtain a total score of 6.388 and a product development strategy with a total score of 5,788. The results of this matrix indicate that market penetration strategies have greater appeal to the company than the two other strategic alternative strategies. ACKNOWLEDGMENT We would like to thank Prof. Bahtiar Saleh Abbas, Vice Rector of BINUS University, for his support and encouragement. We would also like to thank Mr. Engkos A. Kuncoro, Director of BINUS Online Learning, for his providing comments and suggestions regarding marketing strategies. References Amini, M. T., Soleimani, N. & Heidari, F. (2013). Strategy formulating by SWOT, IE, QSPM matrice. Case study: The maintenance management of Pars Jonubi gas complex. International conference of management, innovation and national production. Shahrivar 2013. Qom. Iran.

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