Corporate Strategy Formulation and Implementation in Hospitality Industry
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Added on  2023/06/18
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This report discusses the process of corporate strategy formulation and implementation in the hospitality industry, with a focus on Premier Inn. It covers the challenges of implementing a corporate strategy and the effectiveness of implementing it. The report also includes a discussion on the subject of Strategic Hospitality Management.
Strategic Hospitality Management
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Table of Contents INTRODUCTION...........................................................................................................................3 MAIN BODY...................................................................................................................................3 Corporate strategy management and formulation in the hospitality industry.............................3 Process of Corporate Strategy formulation in hospitality industry.............................................5 Challenges of implementing a corporate strategy......................................................................7 Effectiveness of implementing a corporate strategy.................................................................10 CONCLUSION..............................................................................................................................11 REFERENCES..............................................................................................................................13
INTRODUCTION Strategic management refers to the efforts established and implemented by the managers of the companies in the hospitality industry in order to develop a plan. This plan and strategy will help the business in dealing with different challenges and aspects in the industry. The main objective behind the strategic leadership is bringing the practices that will make the management productive(Andreeva and et. al.,2019). These strategies will help the companies in dealing with the competitors, they can take use these managerial strategies in times of challenges. Hospitality industry is filled with competitors and thus to lead in such industry is difficult for the companies. Strategicmanagementgivestheorganisationflexibilitytoadapttotheeverchanging environment. In this report, Premier Inn is considered which is a UK based hotel chain having more than 800 hotels across the country. This report aims to cover the formulation of corporate strategies and the strategic management applied to the hospitality industry. Along with this the process of corporate strategy formulation and implementation of the respective hotel is discussed in comparison with another hotel. MAIN BODY Corporate strategy management and formulation in the hospitality industry Strategicmanagementreferstotheprocessofplanning,monitoring,analysisand assessment of the needs and challenges in the organisation. These are developed as they help the business in meeting its goals and objectives . The business environment is filled with constant changes and thus the business must be smart enough to handle and deal with these changes (Baxter, Woodley and Hamilton, 2017). The corporate is required to formulate strategies in the business , apply them in the course of the business and at the end manage the different strategies that are applied. Hospitality industry is exposed to several factors in the environment and thus the company must analyse the environment with the help business model. Strategy formulation is one of the component of strategy management, the management process contains processes such as goal setting, analysis, strategy formulation, implementation, evaluation and control. The strategy formulation is a process which considers several factors of the business environment both internal and external(Bokareva and Yudina,2020). These are made by keeping in the mind, the objectives that the organisation wants to achieve. Management
process revolves around the several strategies that the company has applied in their business to deal with the challenges that stops the company in attaining its goals. In context of Premier Inn, they make strategies in order to ensure profitability, this helps them in sustaining in the environment for a longer period of time. These strategies in Premier Inn are made on the basis of different models. Further Ansoff matrix is applied on Premier Inn: Ansoff Matrix revolves around four pricing strategies that the company can opt for, in order to make their business successful. Ansoff matrix helps the managers and marketers in analysing the risk situation in the market and application of the right strategy in the business model.ï‚·Market penetration-This kind of strategy focuses on methods that will increase the sales of the existing products and services in the existing market. This strategy is applied by those companies who are not looking for any kind of new prospect in the business. Premier Inn is one of the leading hotel in the countries in which they are operating and thus they do focus on enhancing or changing the strategies in the current market (Chernov and et. al., 2019). Their old strategies are good enough to capture the majority of the share in the market.ï‚·Product development-This strategy focuses on introduction of totally new products and service line in the existing market. Premier Inn is a big hotel chain in the UK and they only provide the accommodation services under the name of Premier Inn. Currently the company is not looking for diversifying their services in the environment and plans to the stick to the accommodation services for near future.ï‚·Market development-This strategy focuses on targeting new customer base or the new market with the existing line of services and product. Premier Inn has hotels in five countries namely United Kingdom, Ireland, UAE, Qatar and Germany. The company is thinking of expanding their hotels into more countries and compete with the market players of these industries(da Silva and et. al.,2019). Therefore the company is opting for the market development strategy in their business in order to attain the set objectives and goals. ï‚·Diversification-This focuses one expanding the business with the new product or service line. Premier Inn has no plans of diversifying their services though they are looking for getting into new market. Therefore the company won't be choosing and implementing this strategy in the course of their business. This strategy is generally chosen by the
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companies which are new in the market or the companies who are unable to do good in a market. Process of Corporate Strategy formulation in hospitality industry Setting Organisation's Objectives-This is one of the key component of the business that helps in attaining the long term objectives of the company. This is one of the key component of the business that helps in attaining the long term objectives of the company. In instance of Rosewood hotel, their objective is to buy more real estate and start new hotels in the country. They have expanded their operations in 16 countries but they have only 28 hotels (Steps in Strategy Formulation Process, 2021). Evaluating the organisational environment-The company needs to evaluate the factors in the environment that impact the operations of the company. The strategies made by Premier Inn must be in compliance with the environment. As in the hospitality industry they look more into the social and environmental factors. In instance of Rosewood hotel, Rosewood also focuses on the factors that directly impacts the profitability and operations of the hotel chains operated in several countries. Setting up a Quantitative target-Strategies and plan can only be made if the company is looking to achieve something particular in the business. These objective must of quantitative nature so that the implementation and analysis of strategies can be done smoothly. Premier Inn's main target is to set up 100 hotels in 3 countries by the year 2022. The company will develop and form strategies by keeping this quantitative factor in mind. In instance of Rosewood hotel, Rosewood Hotel also plan to increase the number of hotels operational in UK. So that they can provide their services in many cities across UK. They aim to double the number of hotels in UK by the year 2023. Aiming in the context with the divisional plan- This means assigning the roles and contribution required from the divided sub-units(Jaworzynska, 2017). Strategic planning is done by analysing these roles. Premier Inn should divide the roles that the divisional department needs to play in completion of effective strategy. The Managers and the marketing team of Premier Inn is assigned with the role of analysing the conditions of the country in which they wish to expand their business. In instance of Rosewood hotel, Rosewood Hotel has assigned the plan of finding and purchasing the best property in the different cities of the country. The plan of finding the requirements is communicated to the operational department.
Performance Analysis- This refers to the comparison of the past performance of the company with the current performance. This is done in order to analyse and bridge the required gap in the business. Premier Inn is being able to attain the set objectives and the company has done phenomenal in past years. The company aims to continue this kind of performance in the countries in which they are thinking of expanding. Rosewood Hotel is lacking in few aspects that was planned earlier by the company. Therefore, the company wants to bridge the gap between the planned and current performance by strategically expanding the number of hotels. Choice of Strategy- This is the final step in the process of strategy formulation where the company picks up one strategy. This is finally derived in the business after analysing the objectives and the environment. Premier Inn is opting for market development strategy where they are expanding their services in new countries. The company implies this strategy to effectively accomplish the goals and objectives. Rosewood Hotel is looking for diversification strategy where they want to expand their services as well as the market. Challenges of implementing a corporate strategy Strategies are only effective if they are successfully implemented by the managers of the business. The companies often lack in correctly implementing the strategies which result in failure of achieving the desired goals(Kalkhouran, Nedaei and Rasid, 2017). Premier Inn might face these challenges while implementing the corporate strategies in the business:ï‚·Weak strategy-Strategies are implemented in order to attain a new vision for the business. Strategies are treated as an opportunity that can help the business in creating a roadmap which needs to be focused. The strategy must have the clear milestones, timeline of achieving these and the role of the employees in this(Kavale, 2017). The strategies must be in a way in which the expectations from the employees for the completion of that goal is at a normal pace. A strategy made by the manager that expects the department to overwhelm with too much work and responsibilities would result in failure. In context with Premier Inn they should set up objectives which are fairly possible in that timeline.ï‚·Ineffective training-A new strategy that is being implemented in the business must be backed up with good trained employees. The companies should properly do sessions that will improve the skills and qualities of the employees. The strategy implied in the business must match with the skill set the employee working in the company has. If the
employees are not trained enough to implement the strategy in the business then the whole process of formulating the strategy would get wasted. In context of Premier Inn, they train their employees and front desk department in various aspects such as effective customer acquisition and communication techniques which help them in increasing the productivity.ï‚·Lack of Resources-Implementation can only be effective if the company has enough resources to meet the objectives. The company must have enough of capital, assets and the workforce so that the business can effectively manage to achieve the set strategies. In context of Premier Inn, as their objective is to set up new hotels in several countries they require capital for expansion(Kogawa and Salgado,2017). The strategies made by the company to manage the operations in the expanded countries can only be achieved if the company has enough of the resources.ï‚·Lack of communication-This is another challenge that the company faces while implementing the strategies in the business. Communication is the key of accomplishing the goals in the organisation. Lack of communication can result in not clarity of roles and the team won't be able to effectively implement the strategy in the business. In context of Premier Inn, the managers and the employee have effective communication which helps them in communicating the plans and strategies they need to follow in the hotels.ï‚·Lack of follow through-There should be regular meetings to check if the company is following the right strategies and plans in the whole implementation process. In context of Premier Inn they follow a comprehensive plan which helps them in sustaining in the business.ï‚·Lack of alignment-The company's efforts must be aligned and collaborated so that the strategic goal of the business can be achieved. The companies work and efforts are often misaligned which results in improper working in the organisation. In context of Premier Inn, they have aligned their operations so that they can implement the strategies in the business. ï‚·Inability to track the progress-All the implementation strategy won't be any useful if the company is not able to track their performance. The company must apply effective tools in order to track the strategies are effective enough to support the objectives or not(Li, 2018). In context of Premier Inn, they need to enhance the performance and progress
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tracker in the company so that they can know where they need improvement. They can improvise their strategies and plans after analysing the performance of the company.
Effectiveness of implementing a corporate strategy Corporate strategies are defined as planning methods which helps organisations in aligning their different business operations in order to accomplishing their goals. This covers the widerangeofstrategylevelwhichassistinachievinggrowthandexpandingbusiness (Veselovsky and et. al., 2019). There are various advantages of making effective corporate strategy which Premier Inn could be able to experience which are mentioned below: Enhance profitability:Through executing effective corporate strategy organisation could be able to enhance profit in the market. For instance, if company gets involves with many other organisation than it will diversify its business which could bring more profit to the firm. The company must calculate the return of its investment before making any joint venture as it is important for its overall growth.In context of Premier Inn, the company will increase their revenue when they expand their operations into new countries. Acquiring of new hotels will generate profits for the company, their strategy of market development is effective. Increase Market share:The positive impact of implementing diversifying strategies the company will be able to enhance its market share. The organisation could increase its market share through introducing new products or services and explore new customer base(Nikolaeva, 2018). The company will be able to examine its competition and potential modifications in preferences of consumers which could assist in minimizing the risk of decrement in market share. The market share of Premier Inn will automatically increase when they apply strategy of Market development in the business. ProvideDirection:Throughmakingeffectivestrategiestoachieveorganisational objectives will not only provide company a functional purpose but also assist in knowing how to handle uncertainty. It helps in providing correct and proper direction for its further development which facilitate company in achieving growth. The market development strategy applied in Premier Inn provides direction to the business, the employees and managers will know that they need to put efforts in which direction. ImprovesDecisionmaking:Thecorporatestrategieswillhelpthecompanyin enhancing its decision making procedure(Regent and et. al.,2019). As company will face uncertainties and different situation, this will help the firm in improving its way of thinking about business operations. This will also encourage employees of the firm to participate in decision making process and provide them clear direction to achieve organisational objectives.
Premier Inn's decision making skills got improved when they knew the kind of decisions they need to make in order to strategically achieve the objective. Improves Organisational skills:It will also help company in managing their business activities properly. For instance, if company plans to expand its business than it will require more fund and effective strategies that would result into development of management skills. It will also provide employees an opportunity to understand growth of company and could be able to perform productively(Solesvik, 2018).The skills and culture of Premier Inn hotel will also get improved as the employees will learn new things that they are required to do in the hotel. The strategic approach towards the accomplishment of objective would help the employees in maintaining the decorum of the organisation and culture of the organisation would also get enhanced. Minimizing Risk:The effective corporate strategies help in reducing the risk of failure of business operations. For instance, if company faces economic instability which could impact its business than it could be minimized by implementing effective strategies. Corporate strategies help in adding extra protection layer for the company. Strategic approach helps in eliminating the risk factor from the business as Premier Inn would be aware about the uncertainties and they will easily deal these risks. Provides Sustainability:The corporate strategies help in measuring growth of company whichassist in examiningthe chancesof survival.These strategiesassist in developing sustainability for the company(Zakharin and et. al., 2021). They help in evaluating the effectiveness of business strategies and also assist in becoming stable independent company. These corporate strategies help in making employees focused and encourage them to achieve organisational objectives in more successful manner. It provides employees job satisfaction which ensure the longevity of company in the market and assist in maximizing possibilities to achieve growth. Premier Inn in order to sustain in the environment for a longer period of time needs to manage the environment as these factors can impact the operations of business at high extent. CONCLUSION From the above report it can be concluded that the hospitality industry has a lot of competition and the organisation are required to develop and formulate strategies in the business so that they can easily attain the objectives. These set strategies need to managed so that the
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organisation can easily apply it in the course of the business. The company often faces challenges in applying and implementing the strategies, there are certain issues that are faced by the managers. The company need to overcome challenges such as lack of communication and resources and ineffective training in order to implement the strategies in such a way that the desired output is achieved in the organisation. These strategies are often effective in driving the desired goals to the business.The company must maintain strategical management in the business as this will help the organisation in dealing with all the aspects and factors related to the business environment. Strategies also helps the business in managing the workforce of the organisation and thus increasing the productivity in the business.