Softlogic PLC is a Sri Lankan based group of companies operating in many sectors including leisure, financial services, retail, and IT services. The company recently established a strategic alliance with two internationally renowned hotel chains named, Centara and Movenpick. Whilst Centara is a luxury hotel located in the coastal line of the island, Movenpick is a city hotel located in the city of Colombo. The following report is a market positioning analysis of the two hotel chains in comparison to the industry giants currently in operation in the Sri Lankan market.

Image result for softlogic plc It can be evidenced that Softlogic PLC has had an incremental growth from its past to present and the positioning of the company in the market is a crucial aspect to be considered. In comparison to Softlogic which is a new PLC in Sri Lanka, there are market giants in the Sri Lankan market that adapts the similar business model such as Softlogic PLC and that is to form business conglomerates with a number of business operations joint together from different sectors. Hayleys PLC has been perhaps the oldest PLC started in 1886 with current operations ranging in manufacturing of activated carbon, importing of rubber products, processing and importing of coconut related products, marketing of industrial related equipment, hotels and spas, production of processed food etc. John Keells is another leading PLC in Sri Lanka and although it too does not have a long standing history the company operates in the sectors of hotels and spas, supermarket chains, travel and tourism, plastic recycling etc. Hemas is another PLC more inclines towards retail operations such as manufacturing and marketing of personal care products, healthcare, transportation and leisure.

The situational analysis carried out on the external environment indicated that the economy of Sri Lanka is highly volatile although there are government policies that have been communicated by the ruling party to make businesses more stable. However, the tax rates and the investment avenues seem to be a discouraging factor to the business sector of the country. Despite this, the exposure of the affluent and upper middle class families tend to incline more towards the western culture and this has led to many of the upper middle and upper class individuals demanding for branded and sophisticated lifestyles. Softlogic’s main intention is to create strategic alliances with international brands so that Sri Lanka is able to experience them in the local market.

However, the SWOT analysis of Softlogic PLC indicates positive strengths the company currently has and many growth opportunities it can consider. The positioning of the hotel chains in the hotel industry of Sri Lanka indicates that the hotels are high priced and high quality due to its international influence. But the expectations and purchasing criteria of the target market in this industry shows that price and experience they gain from a holiday in a hotel is most vital. In addition to this the hotel industry is also highly fragmented with similar PLCs operating with many hotel chains. Thus the positioning for Centara and Movenpick currently is recognized to be unstable but can be improved with correct strategy formulation.





2.1. PEST Analysis 7

2.2. SWOT Analysis 9


2.1. Understand the Target Market 12

2.3. Softlogic’s Hotels 15

2.4. Competitive Positioning 15

2.5. Analyse the Gaps 16

4. SPACE Matrix Strategic Management Method 18


5.1. Product 21

5.2. Price 22

5.3. Place 23

5.4. Promotion 23



Appendix I 27


Figure 1 – Positioning Triangle 11

Figure 2 – Positioning Maps 16

Figure 3 – SPACE Matrix 18

Figure 4 – Product Life Cycle and Psychographic Segmentation 21

Figure 5 – Activity Gantt Chart 27


The following report is an analysis and discussion on the market positioning of Softlogic PLC, a newly established Public Limited Company in Sri Lanka, in the leisure industry the company is operating. Softlogic is a group of companies operating under many sectors as strategic business units and carrying out many strategic key units under each of the sectors. The company established in the year 1991 with only 12 members as a software development company. Today, the company employs over 8000 employees in all the sectors and generates an annual revenue of about USD 300 million through its operations. Overtime the board directors of the company initiated franchise operations with international brands around the world to enable Sri Lankans enjoy and experience luxuries of the world at an affordable cost. Thus the company’s mission states as “Making the right decisions to increase returns on money invested. Employing and rewarding the best, to leverage market potential and become the most admired corporate in Sri Lanka”. The growth of the company from being a small scale software development company to a conglomerate in Sri Lanka was mainly due to the company’s strategic alliances with international and local market leaders.

The sectors are namely, Retail, Automobiles, Financial Services, Healthcare, ICT and Leisure. The retail sector includes the famous international food chain Burger King, Clothing stores that are franchisees of international brands such as MotherCare, Crocs, Prada etc. and consumer electronics stores that are franchisees such as Microsoft, Dell, Phillips, etc. The Healthcare sector of the company operates the largest hospital chain in Sri Lanka names Asiri Hospitals which was recognized as the Most Valuable Medicare Provider in Sri Lanka by the Brands Annual 2012. The financial sector includes brands such as Softlogic Insurance PLC, Softlogic Stockbrokers Pvt Ltd., and Softlogic Finance PLC. In 2014, the Softlogic Finance PLC was valued its assets at LKR 19.4 billion, its customer deposits at LKR 11.7 billion and its customer base at LKR 15.6 billion. In 2011 the company was rated as a BBB-/P3 (Stable) in financial stability. The ICT Sector of the company partners with global giants such as Nokia, Dell, Xerox Microsoft and Blackberry. The automobile sector of the company sells brands such as Ford, Daihatsu and Xiamen King Long. Centara and Movenpick are hotel chains managed under the leisure sector of the business.

Source: (Softlogic, 2017)


When companies are unable to predict the changes taking place in the external environment, the changes are often predicted as uncertain (Milliken, 1987). Changes that take place in the external environment of a business needs to be taken into consideration when making decisions (Duncan, 1972). Thus, environments can either be stable or dynamic depending on the degree changes are taking place (Aguilar, 1967).

2.1. PEST Analysis

The PEST analysis can assess the factors such as political, economic, social and technological (Asheghian & Ebrahimi, 1990; Grant, 1999) that affect the performance of a business.

2.2. SWOT Analysis


The market positioning analysis for Softlogic PLC can be carried out using the three interrelated elements of the Positioning Triangle. The analysis needs to find out the stance of Softlogic in all the three areas as understanding only one or two would not enable to creating of competitive advantage. The leisure industry is chosen for the purpose of analysis as Softlogic can be compared to its direct competitors which are Hayleys, Hemas and John Keells as all these players are industry giants in the leisure sector and are conglomerates similar to Softlogic PLC.

The model will answer the below questions following the analysis.

  • How your target market makes purchasing decisions
  • How your competition positions their products
  • What your product has to offer

Figure 3‑1 – Positioning Triangle

Target Market

Competitive Positioning

Positioning Triangle

Softlogic’s Hotels

Source: (OTMMarketing, 2005)

2.1. Understand the Target Market

Identification of buying criteria the target audience use before purchasing the product.

In the context of the leisure sector, the target audience would be families who seek for a luxury holiday in a hotel environment or business customers who seek for a city hotel for their accommodation during their visit to Sri Lanka.

Segmentation Profile – Travel and Leisure Customers


Customers between 25 – 35 and 65 – 70, the previous which includes young executives and their families with a considerable amount of allocation for holiday and the latter which includes retired individuals with high savings to spend on holidays.


Families that look for more adventure, site seeing and relaxation out of a holiday experience.

The retired individuals often define their holidays as more relaxed and an experience to see new cultures in different parts of the island.


The young executives use the holiday and leisure services one or twice every year on contrast with the retired individuals who plan holidays right throughout the year depending on their savings.


Customers may be Sri Lankans or international tourists visiting Sri Lanka

Segmentation Profile – Business Customers


Local and foreign executives who are between the ages 25 – 60 representing companies that either do businesses with Sri Lankan businesses or investors who consider starting business ventures in Sri Lanka.


These individuals tend to be purpose oriented and career oriented and look for comfort during their stay at the home.


These corporate clients are often sponsored by the companies they represent and thus may have limited allocation of entertainment expenditure.


Corporate clients may come from any part of the world

The market research that was necessary to find out this information was secondary research done through annual reports of the said companies and business magazines that promoted these products to the identified target market. Although this information was published for the purpose of other motives the information given enabled to gauge the level in which Softlogic PLC maintains with other companies in the sector.

Thus the criteria for purchasing of hotels by the target audience would be as follows.

  • Prices: Price of Bed and Breakfast, Half Board, Full Board, Discounts etc.
  • Location: Coastal line, central city, hill country etc.
  • Facilities: Swimming pool, food selection, room space etc.
  • Customer service: Personalized customer service

In the context of Softlogic PLC, the competitive products would be the products and services other players in the market similar to the products and service provided by the sectors under Softlogic PLC. The leisure sector in which the competitors mentioned above are competing operate in terms of city hotels, boutique hotels, tourist hotels and restaurants.

In order to obtain information on competitors it was necessary to conduct primary and secondary research to determine how the competitors of Softlogic are positioning themselves, the strategies they’re using and how successful they’ve been. John Keells PLC operates the Cinnamon hotel chains which offers a range of luxury, beach and business hotels and resorts both within Colombo and in the coastal and hilly area of the island. Hemas PLC operates the Avani hotel chains which are located in the coastal area and in one of the cities popular for its heritage. Hayleys PLC operates the Amaya hotel chain with hotels in the coastal area, central part of the island and the city of Colombo. Jetwing hotels is also another major player in the hotel industry with over 40 facilities island wide and has international presence in countries such as New Zealand and Maldives.

2.3. Softlogic’s Hotels

Softlogic operates two main hotels namely, Centara and Movenpick. Centara is a tourist hotel located in Benthota, a coastal area of the island. The features of the hotel focus mainly on the location of the hotel and the tourists attracts such as the wildlife national parks, the luxurious facilities such as the scenic swimming pool, private spa facilities, comfortable room set ups, meeting halls, wedding halls etc. Movenpick on the other hand is a city hotel located in Colombo providing luxurious stays for tourists who wish to have an accommodation for their business trips and mainly focus on features of convenience and flexibility.

2.4. Competitive Positioning

Cinnamon Hotel chain positioned in the top of the mind recall as Cinnamon Grand hotel is a famous hotel for celebrations and many popular restaurants in the Colombo city. This makes all the other Cinnamon Hotels located elsewhere in the island. Hayleys’ only city hotel is Kingbury which was rebranded recently and since Amaya is the name given for its hotel chain consumers often fail to understand that it is operated by Hayleys. Hemas hotels were costly acquisitions of old hotels that were already in the market but refurbished and rebranded and the brands are not recognized as being operated under Hemas PLC. Therefore, the competitive positioning criteria can be listed as below:

  • Prices of restaurants at city hotels
  • Availability and prices of wedding halls
  • Selection and the level to which the flavours attract the Sri Lankan palate
  • Prices of B&B rate for city hotels and price of FB rate for tourist hotels

Primary research was carried out to understand the perception of the consumers in rating these hotels and all the information mentioned above. The primary research adapted a survey method which was done using an open ended questionnaire and focus group discussions that involved interviewing of consumer ideas and perceptions on hotels and recalling of brands when the brand was shown or heard.

2.5. Analyse the Gaps

The gap that was analysed through this positioning triangle is that all the other companies such as Hayleys and John Keells operate their own branded city hotels and tourist hotels. Softlogic PLC on the other hand operates as franchisee to international hotel chains Centara and Movenpick. This means that the customer segment would be more affluent and focusing more on foreigners visiting Sri Lanka. Thus the gap would be to serve high end market with international standards in customer service, food, and facilities. The positioning map can be drawn as below:

Figure 3‑2 – Positioning Maps

High priced

International Standards City Hotel

d and Creative homes for

Local Standards City Hotels

Value for Money

Cinnamon Grand



Five Star Tourist Hotels

d and Creative homes for

Jetwing Hotels


Cinnamon Hotels

High priced

Simply Accommodation without frills

Value for Money

Source: Developed by author

SPACE Matrix Strategic Management Method

The SPACE matrix enables analyzing and determining strategy formulation for an organisation. The acronym SPACE refers to Strategic Position, Action and Evaluation matrix. The matrix would define the nature of strategy whether it is an aggressive, defensive, conservative or competitive strategy.

Figure 4‑1 – SPACE Matrix

Image result for competitive SPACE matrix

Source: (ManagementMania, 2017)

The framework analyses the external environment using two criteria:

  • Environmental Stability (ES) – These are the factors discussed in the PESTLE section of the report but stability of the business environment for Softlogic can be evaluated using Sri Lanka’s inflation rate, price range of competitive hotels, elasticity of demand for the hotels etc.
  • Industry Attractiveness (IA) – Industry attractiveness in the leisure industry can be evaluated by factors such as barriers to entry, economies of scale, bargaining power of suppliers and customers etc. the basis for this section could be taken through findings from a Porter’s Five Forces analysis.

The internal environment is also described by two criteria:

  • Competitive advantage (CA) – This can be measured through the quality of the hotels, customer loyalty, market share etc. Softlogic has a competitive advantage over its competitors as the hotel chains are international brands unlike the local hotel chains the other players are competing in.
  • Financial strength (FS) – This can be evaluated using factors such as profitability per bed, rate of return on investment, cash flow and debt ratio etc.

In the context of Softlogic PLC the strategy formulation would need to be competitive positioning and the two environments that would need to consider are the industry attractiveness and environment stability. The matrix would only provide a scale to determine the success of formulating the strategy and the applicability of the same to formulate competitive strategies in Softlogic PLC can be ineffective due to many reasons.

  • Since the factors of each relevant environment are rated in numeric and the value for the strategy is calculated, it cannot guarantee if the strategy will be successful in practical form.
  • Factors of the selected environments cannot be given a numeric form as it does not provide a valid foundation for the rationale that acts as the foundation and often these factors change in dynamic environments.
  • There can be factors that are missed out from the selected environments and these can result in the entire formulation of the strategy.

Thus it can be concluded that the applicability of the SPACE matrix may have practical problems in formulating and executing an effective competitive strategy for Softlogic PLC. This is also because the leisure industry is highly dependent on seasonal trends and customer preferences and it is only by learning these changes in detail that the company will have a clear idea as to how the company would approach the competition.


Magrath (1986) states that Neil Borden developed the concept of marketing mix in 1965 and following to this McCarthy introduced the 4Ps of marketing in 1964 which are recognized as Product, Price, Place and Promotion. Waterschoot and Van den Bulte (1992) defined, the term “marketing mix” as the “mixture of elements useful in pursuing a certain market response”. The elements in marketing mix are considered inseparable and these elements act as the foundation for strategic decision making in an organisation.


The product is the hotel accommodation provided by Centara and Movenpick. Since these two strategic alliances were recently launched in the market (2016 and 2017 respectively), the product is in the early stages of entering the leisure market.

Figure 5‑1 – Product Life Cycle and Psychographic Segmentation

Source: (Ruskin, 1999)

Currently, the hotels are in the introduction stage where the revenues contribute towards covering the breakeven and profits can seem to be less or not present at al. However, the strategy for the Product element of the marketing mix by the end of the 3rd year of marketing campaign would be to stabilize the hotels in the growth stage where revenues would create profits and there will be an incremental trend in earning revenue. Thus the innovators of 2.5% who experience the hotel would promote the hotel through word of mouth marketing if the services have been positive to early adapters of 13.5% who will make the purchase the decision as risk they will be taking on their financial expenses.

The core product is the benefit customers would receive when checking in and staying in the hotels. The actual product are the features that are included in the hotel that enables delivery of the benefit to the consumers. The augmented products are the features that create delight to customers and goes beyond simply satisfaction.


Pricing strategy takes a similar pricing strategy the hotel chains follow in the other countries they operate. However, whilst aligning the international pricing to the local market, the hotels follow a price skimming strategy where the prices are designed to enable the business to maximize sales on their hotel rooms and other facilities by setting prices very high during the introductory phase but lower the prices gradually as the hotel captures the market over time.

One of the advantages of price skimming is that it enables the hotels to maximize profits on early adopters before lowering prices to attract more price-sensitive guests. Furthermore, not only does price skimming enable the hotel to recover its investment costs, it also creates an illusion of quality and exclusivity of the international hotel experience that is introduced to the Sri Lankan market.


The hotel is made available for booking and reservation through online mediums that include the company website and the travel sites such as expedia.com and booking.com. In addition to this offline booking over the counter is also possible either at the head office where the main operations take place or the hotel’s front desk itself. This method is planned to continue for the period of next three years as it allows a broader segment of customers to be targeted.


The hotels do not follow a uniform promotion strategy for each market. As a result, the Marketing Communication tools used are diversified according to the local market’s attributes. Birnin and Bowman (2007) defined the diversity in marketing promotion as marketing mix regionalization or clustering. Clustering refers to compromising localization and standardization. Localization is most suited for customer-based marketing strategies, while standardization would accommodate innovation-based strategies and cost-based competition. According to Kapnopoulou (2011), the hotel’s policy on advertising is to focus mostly in the entire conglomerate name rather than specifying the brands that operate under the conglomerate. Therefore, more budgets are dedicated to advertising media that promotes the all the brands that operate under the Softlogic Corporate brand. However, during the launch of the hotels the brand names of the hotels were promoted separately as it was being introduced for the first time. Carpenter and Lehmann (1985) stated, the advertising of a service strengthens the overall brand name attraction. The Marketing Department plans to focus on AIDA model (Awareness, Interest, Desire, and Action) within the next three years and combine these consumer purchasing patterns with the PENCILS (Publications, Events, News, Community involvement activities, Identity media, Lobbying activities, Social responsibility activities and Social media and networking) marketing initiatives.


The report discussed and analysed the competitive positioning of Softlogic PLC in the leisure sector in terms of its two new hotel chains Centara and Movenpick. The first section of the report provided an introduction to Softlogic PLC and the industry it operates. The second section of the report detailed in descriptive form the situational analysis for Softlogic and its operations in Sri Lanka. This was carried out using the PESTEL and the SWOT analysis accordingly to analyse the external and internal environments. The third section of the report analysed the hotel chains current market positioning in the market in comparison to major players in the Sri Lankan market operating currently under PLCs similar to Softlogic PLC. The final section of the report is a critical discussion of how the marketing mix of the hotel has been deployed.

On a final note it can be concluded that although Centara and Movenpick are international hotel chains Softlogic PLC has a strategic alliance with, since Sri Lanka is a tourist destination, the hotel industry and the leisure sector is highly fragmented with many large and small local players that provide services to match international standards. Since the hotels are new to the market, the positioning of Centara and Movenpick in the minds of the consumers is not stable and not in the top of the mind recall. Also since the hotel chains are international, the management of Softlogic would need to be concerned on maintaining the standards with their human resources and physical resources. The economic factors analysed in the second section illustrates that the economy of Sri Lanka is not very stable. However, the identified positioning of Centara and Movenpick is high price and high quality but this will need to be maintained in the long term despite the current market conditions.


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Appendix I

Figure 0‑1 – Activity Gantt Chart